TOPIC: INVESTIGATING INTO HUMAN BASED DECISION MAKING (intuition

and instinct) WHEN VENTURING INTO NEW MARKETS: A CASE OF PACIFIC

CIGARETTE COMPANY

Table of contents
CHAPTER TWO: LITERATURE REVIEW ................................................................................................................... 1
Chapter Abstract ............................................................................................................................................... 1
Introduction ...................................................................................................................................................... 2
The rational decision making approach. ....................................................................................................... 3
2. Bounded Rationality Model. ..................................................................................................................... 5
3. Creative Decision Making approach .......................................................................................................... 5
4. Intuitive Decision Making approach.......................................................................................................... 6
The evolution of Decision making in Business .................................................................................................. 9
Challenges associated with human based (intuitive) decision making ........................................................... 10
Human Processes in Decision making ............................................................................................................. 14
Artificial Intelligence (AI) decision making processes ..................................................................................... 15
PARTNERSHIP OF HUMANS AND DSS IN GENERAL DECISION MAKING .......................................................... 17
MARKET ATTRACTIVENESS DETERMINATION STRATEGIES OR MODELS ........................................................ 18
The GE Mckinsey Model .............................................................................................................................. 20
The MABA Analysis...................................................................................................................................... 20
Factors influencing Market attractiveness in general and in the tobacco/cigarette manufacturing industry 24
PARTNERSHIP OF INTUITION AND DSS IN ESTABLISHING MARKET ATTRACTIVENESS ................................... 26
DSS SUPPORT SYSTEMS IN THE TOBACCO INDUSTRY ..................................................................................... 28
Tobacco industry strategies to subvert scientific knowledge ..................................................................... 28
Conclusion ....................................................................................................................................................... 32

CHAPTER TWO: LITERATURE REVIEW

Chapter Abstract
This chapter’s review is focused on two major research fields which are decision making and market
attractiveness. Factors to be considered in determining market attractiveness will be reviewed and the
nature and alternatives of the decision making process with the intention of achieving objectives one to
three, which will further highlight what literature says with regard to choosing the most attractive
market amongst a set of alternatives. This is done by aggregating relevant empirical findings on decision
making strategies applied and factors taken into consideration for determining market attractiveness.
These findings will be applied in chapter three for the development of the theoretical model.
Introduction
Various authors have attempted to define decision making, with various concepts and theories, with
most sharing a common basis on decision making being regarded as a process, done by a decision
maker, who has the duty to choose amongst a set of alternatives. To be precise decision making is
defined by Y Wang, (2007) as “a basic cognitive process of human behaviours by which preferred
options or a courses of action are chosen from a set of alternatives based on a set certain criteria”. The
management study guide further adds on to this idea by stipulating that “A decision can be defined as
a course of action purposely chosen from a set of alternatives to achieve organizational or managerial
objectives or goals”. Having a basis on these definitions, and the researcher’s overall literature review,
it can generally be said that various decision making strategies and theories have been used in diverse
disciplines such as computer science, psychology, sociology. Some of the strategies include the
Bayesian and the expected utility method. Zachary, Wherry, Glenn and Hopson (1982) add on with the
idea that they are three basic constituents in decision making, which are the decision situation, the
decision maker and the process.

Further on, the process of decision making has often been emphasized by various researchers to be of
great importance to any business’ growth, sustainability and success. Holding the view that decision
making processes have become one of the daily challenges faced by the manufacturing sector due to
various operational controls. Therefore, increasing effectiveness in decision making is an important part
of maximizing employees’ effectiveness at work and that of the business in general. A computerized
system which supports the decision making process has become a necessity, enabled with the
advancement of business information systems and evolving technological needs. Therefore, decision
support systems play a big role and are becoming an important element in industrial investment decision
activities and contribute in supporting decision makers for all levels in manufacturing management
(Shim et al, 2005).
Individuals throughout organizations are said to use the information they gather to make a wide range
of decisions. These decisions may affect the lives of others and change the course of an organization.
For instance, according to, Lumen (May, 2016) “ the decisions made by executives and consulting firms
for a certain firm called Enron ultimately resulted in a $60 billion loss for investors, thousands of
employees without jobs, and the loss of all employee retirement funds. But Sherron Watkins, a former
Enron employee and now-famous whistle blower, uncovered the accounting problems and tried to enact
change. Similarly, the decision made by firms to trade in mortgage-backed securities is having negative
consequences for the entire economy in the United States. All parties involved in such outcomes made
a decision, and everyone is now living with the consequences of those decisions.”

Based on the researcher’s overall literature review, it has also been discovered that, decisions can be
classified into three categories based on the level at which they occur. According to Mason Carpenter,
Talya Bauer, Berrin Erdogan (Dec 2012) in their book Management Principles v1.0 (creative commons
publisher) these include strategic decisions which set the course of an organization. Tactical
decisions which are about how things will get done and finally, operational decisions which refer to
decisions that employees make each day to make the organization run.

In consideration of all the mentioned decision types, they are basically four different approaches
(alternatives) to decision making governing the procedures taken, for each type of decision. According
to Lumen (May, 2016) these are rational decision making model, moving with the bounded rationality
decision making model, the intuitive decision making model and the creative decision making model
.It is the approach which determines the outcome or success of the decision made.

The rational decision making approach.

The rational decision-making model describes a series of steps that decision makers should consider if
their goal is to maximize the quality of their outcomes. It sets out to help decision makers make the best
choice, through the formal steps of the rational decision-making model.
Rationality is based on “analyzing knowledge through conscious reasoning and logical deliberation”
and “develop alternative solutions” thanks to a methodical information gathering and acquisition
(Jarrahi, 2018, p. 3; Sadler-Smith & Shefy, 2004, p. 77). Being rational involves looking into costs and
benefits and examine which alternative solution is appropriate (Dane et al., 2012 p. 188). Analytical
reasoning is heavily based on depth of information, indeed “the more information, the better” (Jarrahi,
2018, p. 3; Sadler-Smith & Shefy, 2004, p. 77). Moreover, rational thinking is not based on feelings,
but it is rather based on logical reasoning to conceal emotions from the decision making (Sadler-Smith
& Shefy, 2004, p. 77). Rational decision making can be easily decomposed into rational axioms and
prefered conditions to set up frameworks of alternatives to deliberate on the best option (Fishburn, 1979,
p. vii). As a result, rational decision making is objective and impersonal, i.e. there is no personal
judgement. That so, machines can easily emulate humans’ rationality process in decision making
(Jarrahi, 2018, p. 6).

This model consists of 8 basic steps which can be represented as below

 Fig 1.1 Rational decision making approach
Source:
Comment: The outcome of the decision that has gone through the entire cycle is often said to
influence the next decision to be made.

While decision makers can get off track during any of these steps, research shows that searching for
alternatives in the fourth step can be the most challenging and often leads to failure. In fact, one
researcher found that no alternative generation occurred in 85% of the decisions he studied. Conversely,
successful managers know what they want at the outset of the decision-making process, set objectives
for others to respond to, carry out an unrestricted search for solutions, get key people to participate, and
avoid using their power to push their perspective.

According to, Lumen (May, 2016) in order for this decision making model to be effective, the decision
maker should make sure that they establish a decision criteria before searching for alternatives. This
would prevent them from favoring one option without bias, thus in turn helping to set the agreed upon
criteria accordingly. To which the advantage of this model is said to be that it urges decision makers to
generate and consider all alternatives instead of only a few. By generating a large number of alternatives
that cover a wide range of possibilities, it is likely to make a more effective decision that does not
require sacrificing one criterion for the sake of another.

Despite all its benefits, this decision-making model is said to involve a number of unrealistic
assumptions as well. It assumes that people completely understand the decision to be made, that they
know all their available choices, that they have no perceptual biases, and that they want to make optimal
decisions. Nobel Prize winning economist Herbert Simon observed that while the rational decision-
making model may be a helpful device in aiding decision makers when working through problems, it
doesn’t represent how decisions are frequently made within organizations. In fact, Simon argued that it
didn’t even come close. With other researchers condemning the model on the basis that rationality is
never rational in a constantly changing environment.

2. Bounded Rationality Model.

The bounded rationality model of decision making is said to recognize the limitations of humans’
decision-making processes. According to this model, individuals are said to knowingly limit their
options to a manageable set and choose the first acceptable alternative without conducting an exhaustive
search for alternatives. An important part of the bounded rationality approach is the tendency
to satisfice (a term coined by Herbert Simon from satisfy and suffice), which refers to accepting the first
alternative that meets your minimum criteria. For example, many college graduates do not conduct a
national or international search for potential job openings. Instead, they focus their search on a limited
geographic area, and they tend to accept the first offer in their chosen area, even if it may not be the
ideal job situation. Satisficing is similar to rational decision making. Lumen (May, 2016) says “the main
difference is that rather than choosing the best option and maximizing the potential outcome, the
decision maker saves cognitive time and effort by accepting the first alternative that meets the minimum
threshold. This model can never be applied to a business setup where strategic implementations profits
need to be made for the long run. Based on the facts that optimal efficiency and effectiveness for the
business are never achieved.”

3. Creative Decision Making approach

In addition to the above decision making models there is creative decision making. Creative decision
making is said by Lumen (May, 2016) to be “a vital part of being an effective decision maker
.Creativity is the generation of new, imaginative ideas. With the flattening of organizations and intense
competition among companies, individuals and organizations are driven to be creative in decisions
ranging from cutting costs to generating new ways of doing business”. It should be noted that, while
creativity is the first step in the innovation process, creativity and innovation are not the same thing.
Innovation begins with creative ideas, but it also involves realistic planning and following-through.
Innovations such as 3M’s Clearview Window Tinting grow out of a creative decision-making process
about what may or may not work to solve real-world problems.

Lumen (May, 2016) stipulates that “the five steps to creative decision making are similar to the previous
decision-making models in some key ways. All the models include problem identification, which is the
step in which the need for problem solving becomes apparent. If you do not recognize that you have a
problem, it is impossible to solve it. Immersion is the step in which the decision maker consciously
thinks about the problem and gathers information. A key to success in creative decision making is
having or acquiring expertise in the area being studied. Then, incubation occurs. During incubation, the
individual sets the problem aside and does not think about it for a while. At this time, the brain is
actually working on the problem unconsciously. Then comes illumination, or the insight moment when
the solution to the problem becomes apparent to the person, sometimes when it is least expected. This
sudden insight is the “eureka” moment, similar to what happened to the ancient Greek inventor
Archimedes, who found a solution to the problem he was working on while taking a bath. Finally, the
verification and application stage happens when the decision maker consciously verifies the feasibility
of the solution and implements the decision.”

Fig 1.2 The creative decision making approach

Source:

4. Intuitive Decision Making approach.

4.1 Intuition
Intuition can basically be defined as a sense of reasoning dependent upon the professional experience
of decision makers in their field of professionalism. It is defined by Matzler,Mooradian, and Bailom
(September, 2007) et al as “not a magical sixth sense or a paranormal process; nor does it signify either
random and whimsical decision making or the opposite of reason. Rather, intuition is a highly complex
and highly developed form of reasoning that is based on years of experience and learning, and on facts,
patterns, concepts, procedures and abstractions stored in one’s head”. In the former’s research of
intuition in decision making, they seek to address the possibility of executives honing their intuition
and thereby improving their chances of making good decisions. Based on their research it was
discovered that instinct can only be cultivated by 6 basic factors which include, emotional intelligence,
networks, experience, curiosity, limits, tolerance.
The researchers stipulate that “the more extensive a decision maker’s experience, the more patterns he
or she will be familiar with; the more patterns, the better the intuition”. Intuition relies on expertise
(Sadler-Smith & Shefy, 2004, p. 81). Indeed, according to Sadler-Smith & Shefy (2004, p. 76), domain
experts are the individuals that can exploit at best intuition for decision making. The concept of domain
expert - the most likely person to effectively benefit from intuition - is an individual who has
accumulated knowledge and expertise in a precise field thanks to experiences (Kahneman & Klein,
2009; Klein, 1998; Salas et al., 2010). Studies in psychology have found that a decision maker needs at
least 10 years of domain-specific experience to develop the gut feeling needed to make good instinctive
decisions. Other studies have shown that senior executives at the highest level make more intuitive
decisions than senior executives at the middle and lower levels, and that owners of small businesses
make about the same proportion of intuitive decisions as the most senior executives of large companies.
Hence the reason why senior executives are mainly associated with strategic decisions whereas the
middle and lower are more inclined to tactical and operational decisions (routine/ standardized).
As intuition relies on subjectivity, this process cannot be decomposed in tasks like a rational process, it
is rather similar to tacit knowledge obtained through experiences and familiarity (Dane et al., 2012, p.
187, 188; Jarrahi, 2018, p. 5; Klein, 2015, p. 167). Indeed, it is hard to decompose the judgment made
by an artist about an artwork or to judge if a behavior is moral or even to explain why a decision feels
right (Dane et al., 2012 p. 188; Jarrahi, 2018, p. 4). In other words, intuitive decision making is linked
to emotions, sense-making and gut feeling. Moreover, intuition is connected to perception and
subjectivity and intuition is built upon experience and familiarity (Klein, 2015, p. 167). Finally, intuition
depends on both expertise and feelings (Sadler-Smith & Shefy, 2004, p. 81).

Moving on to networks, executives are said to need networks in order to share experiences and to hear
how their decisions have been received. Hence, Matzler,Mooradian, and Bailom (September, 2007) top
senior executives need surround themselves with people who are their equals and with whom they can
maintain an open climate of discussion. Resulting in constructive discussions yielding effective
business decisions in the end.

Further on with regard to emotional intelligence, the neuroscientist Joseph LeDoux has proven that the
amygdala — site in the brain of emotional memory — categorizes stimuli and triggers behavior faster
than cognitive processes. In other words, emotion precedes cognition. According to psychologist Daniel
Goleman, 90 percent of the differences between top-performing and average-performing senior
executives can be explained by emotional intelligence. And this primarily means being able to recognize
and interpret one’s emotions.

Looking at tolerance, it is said by Matzler, Mooradian, and Bailom (September, 2007) that “intuition
grows best in an environment in which both positive and negative experiences can be had”. For top
management a willingness to tolerate mistakes is required. Senior executives can create such cultures
by publicly and continuously supporting people who take risks and make mistakes. As Nestlé S.A. CEO
Peter Brabeck-Letmathe said about the process of hiring or promoting senior executives, “It is just as
important to investigate (their) failures or defeats as their successes”. In the researcher’s view, only a
person who has some failures to show in his history can carry out a leadership role in a forward-looking
way, because only then is it clear that the person was willing to take risks to achieve the desired or much
needed outcome.
In the instance of curiosity, according to Matzler, Mooradian, and Bailom (September, 2007) curiosity
— it is a prerequisite for discovering new opportunities. As management personnel Peter Drucker wrote,
“A good manager always focuses his attention more strongly on opportunities than on risks, constantly
worrying about problems does not really move things forward. Doing this merely averts damage to the
company. Positive results can only come about if senior executives consistently exploit opportunities.
Thinking and acting in an opportunity-oriented way is a prerequisite for striking new paths. Striking
new paths is a prerequisite for gathering experiences. And intuition needs experience.”

Limits are always necessary in anything (good or bad), hence a reliance on intuition can sometimes be
taken to unnecessary extremes. Again, Drucker’s words are wise: “I believe in intuition only if you
discipline it. The ‘hunch’ artists, the ones who make a diagnosis but don’t check it out with facts, with
what they observe, are the ones who kill businesses.” As with the chess master who spends a fair amount
of time rethinking the decision he intuitively made within seconds, thus executives should reflect on
their intuitive decisions before they execute them.
The model:
In regard to various researches, the intuitive decision-making model has emerged as an alternative to
other decision making processes. It has been be referred to as a human based decision making model.
The model is said to be a technique for arriving at decisions without conscious reasoning. According to
Lumen (May, 2016), “A total of 89% of managers surveyed admitted to using intuition to make
decisions at least sometimes and 59% said they used intuition often. Managers make decisions under
challenging circumstances, including time pressures, constraints, a great deal of uncertainty, changing
conditions, and highly visible and high-stakes outcomes. Thus, it makes sense that they would not have
the time to use the rational decision-making model. Yet when CEOs, financial analysts, and health care
workers are asked about the critical decisions they make, seldom do they attribute success to luck. To
an outside observer, it may seem like they are making guesses as to the course of action to take, but it
turns out that experts systematically make decisions using a different model than was earlier suspected.”
Research on life-or-death decisions made by fire chiefs, pilots, and nurses finds that experts do not
choose among a list of well thought out alternatives. They don’t decide between two or three options
and choose the best one. Instead, they consider only one option at a time. The intuitive decision-making
model argues that in a given situation, experts making decisions scan the environment for cues to
recognize patterns. Once a pattern is recognized, they can play a potential course of action through to
its outcome based on their prior experience. Giving credit to training, experience, and knowledge, these
decision makers are often said to have an idea of how well a given solution may work. If they run
through the mental model and find that the solution will not work, they alter the solution before setting
it into action. If it still is not deemed a workable solution, it is discarded as an option, and a new idea is
tested until a workable solution is found. Once a viable course of action is identified, the decision maker
puts the solution into motion. The key point is that only one choice is considered at a time. Novices are
often said to be incapable of making effective decisions this way, because they normally do not have
enough prior experience to draw upon.

The evolution of Decision making in Business

Historically, decision techniques proved to focus on outcome prediction, not decision process or
technique. “The reason for this focus is evident: in the absence of predictive information, decision
making is simply the process of guessing the future consequences of impending choice. Modern
decision making is the result of very small incremental gains in the understanding of decision making
processes and human thought, and the application of technology tools to support the process.” Josef
(January, 2013) et al.

Decision making is not an exclusively human problem, choices and consequences always need to be
weighed inside the human mind. This dilemma has been made worse by the increased data and sources
of that data. According to, Josef (January, 2013) “modern technology and psychology have attempted
to tame the great decision dilemma in the 20th century.” With the application of Bacon’s scientific
method in the area of psychology which has led to major revelations about how people make decisions,
pointing out typical flaws in their interpretation of the data that influences their choices, and quantitative
techniques used to give value to how a person feels. Buchanan, Leigh & O'Connell, Andrew, (2006) in
their article ‘A brief history of decision making’ stipulate that with the advent of computing power,
along with the development of more sophisticated statistical analysis techniques, an opportunity arose
in this period, which sort to assist overcome the decision maker’s prime obstacle: too much disparate
data to handle at one time. Approaches therefore began to focus on the process of data collection and
analysis to support, and even to replace, human decision making.

A little further up the evolutionary ladder, human decision makers, with the mixed blessing of some
capacity to think and choose, having been looking for support for their decisions since the beginning of
recorded history, In earlier times, societies consulted their elders for alternatives and experimental data
about the probability of success for decision choices in similar situations. Then, at some point, this
advisory function shifted to soothsayers, astrologers, and religious figures — the management
consultants of the day.
Buchanan, Leigh & O'Connell, Andrew, (2006) et al, concur of Chester Barnard a telephone executive
who imported the term decision making from administration into the business world. Where it is said
to have begun replacing narrower terms that include “resource allocation” and “policy making”. The
introduction of this phrase changed how managers thought about what they did and spurred a new
crispness of action and desire for conclusiveness, argues William Starbuck, professor in residence at
the University of Oregon’s Charles H. Lundquist College of Business. “Policy making could go on and
on endlessly, and there are always resources to be allocated,” he explains. “‘Decision’ implies the end
of deliberation and the beginning of action.”

So Barnard—and such later theorists as James March, Herbert Simon, and Henry Mintzberg—laid the
foundation for the study of managerial decision making. But decision making within organizations is
only one ripple in a stream of thought flowing back to a time when man, facing uncertainty, sought
guidance from the stars. The questions of who makes decisions, and how, have shaped the world’s
systems of government, justice, and social order. “Life is the sum of all your choices,” Albert Camus
reminds us. History, by extrapolation, equals the accumulated choices of all mankind.

Buchanan, Leigh & O'Connell, Andrew, (2006) in their article A brief history of decision making
conclude that, “the ideal process for decision making must provide a method for comparing and
weighting the decision criteria in a way that reflects both their subjective and objective values”. As Carl
Jung stated in his 1923 text “Psychological types,” “we should not pretend to understand the world only
by intellect; we apprehend it just as much by feeling. Therefore, the judgment of the intellect is at best,
only half of the truth, and must, if it is to be honest, also come to an understanding of its own
inadequacy.”

Challenges associated with human based (intuitive) decision making

Context plays an important role in decision making processes, one of the key factors that can influence
the decision making process is the environment (Papadakis,1998, p. 117, 118). Decision making process
comprises three challenges related to the environment and organization: uncertainty, complexity, and
ambiguity (Snow et al., 2017, p. 5; Jarrahi, 2018, p. 1).

According to Pomerol, one experiences uncertainty in decision making when “the future states are
obviously not known with certainty” and uncertainty arises from a lack of information about the
environment (Pomerol, 1997, p. 5; Jarrahi, 2018, p. 4). Making a decision in an uncertain situation
necessitates to interpret the situation where information is missing about the future outcomes and
alternatives or the consequence of outcomes and alternatives. Complexity is concerned with “situations
(that) are characterized by an abundance of elements or variables.” (Jarrahi, 2018, p. 5). Making a
decision in complex situations requires to analyze a lot of information in a short period of time, it can
be overwhelming for human brains (Jarrahi, 2018, p. 5). Ambiguity is context dependent as it relates to
“the presence of several simultaneous but divergent interpretations of a decision domain” and
ambiguous situations are occurring “due to the conflicting interests of stakeholders, customers, and
policy makers.” (Jarrahi, 2018, p. 5). The decision maker confronted to ambiguity cannot adopt a
rational and impartial decision making approach but a subjective and intuitive one as he has to find a
common ground to rally the divergent parties at stake in the decision making (Jarrahi, 2018, p. 5).

Decision making in a business without the use of an information system of any sort is often said to be
intuitive driven. To add on, the Business insider (August, 2015) in their article Cognitive biases that
affect decisions - Business Insider concurs with other researchers on the vulenerability of intuitive
decision making to various cognitive biases that exist within this technique. The author presents facts
of the existence of twenty bias types. These biases are said to often distort the validity and authenticity
of decisions made based on instinct. To highlight just a few, they include anchored bias, choice
supportive bias, confirmation bias, clustering illusion, zero risk bias. Thus being the drivers of problems
associated with human based decision making in business. To which a problem is defined as any
unexpected discourse from the expected outcome.

Wilding (March, 2014) in her article,”the science of intuition” adds on with the idea that because each
person’s intuition is based on a collection of individual experiences, it is subject to opinion and bias.
Hence In many instances, it’s virtually impossible to make decisions without using data. If a company
has been collecting and relying on data for decades and is thriving, for instance, there’s no sense in
completely throwing out the old playbook. Big data can point out patterns that are too subtle for our
brains to detect. Analytics don’t necessarily have to overrule human judgement, but they can
complement it. Rather than trying to value one over the other, leaders can combine insights from big
data and intuition to make decisions. This approach gives them the best of both worlds.

According to Wilding, (March, 2014)”a lot of entrepreneurs, make decisions that are driven by their gut
instincts, not by data. This seems to be a great with regard to when a company’s just getting off the
ground, and its core agenda is being conceptualised. In the long run as the company grows and a lot of
business units and professionals get involved, such an approach is said to narrow an organisation’s
horizons and compromises its capability to spot potential market opportunities.” He further says
that,there’s a lot more data available now than there was 10 years ago (and definitely 20 years ago) and
until very recently businesses performed analytics on data that they got from their own data bases. Now
there’s a lot of internal data bases available, so an entrepreneur not only has to look at internal company-
specific data, but also external data, and have the skills to analyse/mine it for insights. Hence, this
process can only be made efficient and consistent with the use of an information system such as a
decision support system.

Given the above three general challenges, these have been seen to be aggravated by the current
challenges being experienced within the tobacco industry. Rendering intuitive strategic decision making
almost ineffective. The world trade Mark Review (October, 2017) presents the facts that “given the
consumer health issues surrounding its products, the $700 billion tobacco industry is mired in
controversy and frequently finds itself facing regulatory pressure from governments and other
authorities”. Against this backdrop, a number of countries have made a concerted push to limit the
proliferation of tobacco products, with increased tax rates, tougher regulations and stricter legislation
around sales and advertising all contributing to the year-on-year decrease in sales of tobacco in
developed countries. The industry is often said to be embroiled in protracted legal battles too, and
companies have been hit by several large lawsuits in recent years, including a case in Canada in which
the largest damages award in the country’s history was handed out. The world trade Mark Review
(October, 2017) adds on to this by saying “while cigarette sales are expanding to new markets, industry
market shares are consolidating, and the market is increasingly controlled by a few international
companies. In 2001, a little more than 43% of global market sales were controlled by the five leading
transnational tobacco companies (T T C). By 2017, 80.6% of the market was controlled by TTCs. Over
the last decade, the international cigarette market has been dominated by five companies: China
National Tobacco Corporation, Philip Morris International, British American Tobacco, Japan Tobacco
Inc. and Imperial Tobacco.”

The world trade Mark Review (October, 2017) holds the view that despite this, ‘Big Tobacco’ – which
consists of the five major companies – is very much thriving for big multinationals. Population
increases, have improved sales in emerging markets and a drive to augment profitability through pricing
have all helped to offset losses and maintain the economic performance of the leading brands.
Additionally, as the market is dominated by a small handful of companies – including Philip Morris
International, British America Tobacco, Imperial Brands, Altria and Japan Tobacco – this has made the
barrier to entry very high. This dominance protects market share and, in turn, has a direct impact on
brand strength for these domineering companies, leaving third world cigarette or tobacco companies in
Africa with no chance to survive in their very market. As a corollary of the success of the industry over
the last year, combined with a relatively small universe of companies, nine of the top ten tobacco brands
have increased in brand value over the past year:.Hence leaving the emerging and still growing African
indigenous tobacco companies with no chance of making it especially in targeted areas.
According to the WHO framework Convention on tobacco control, in their Global progress report
(2018), the tobacco industry world over has been suffering from a myrade of challenges. These
challenges include suffering effects of illicit cigarette smuggling by multinational companies like
BAT, leaving small companies with lesser chances of making it in the industry. Leaving
upcoming cigarette companies at startup positions which do not enable them to manipulate the
market as the big multinationals are. This could be averted through effective market research
and decision making with technological support, so as to help to profitable areas to invest in or
in short supply of cigarettes, enabling these small companies to compete and make profits in the
tobacco or cigarette market.

Lack or little exposure to expertise, information and an incapacity of local African owned
cigarette manufacturing companies to produce good quality and international product brands , is
another challenge being faced in the tobacco industry. According to J. Smith (2018), this has
resulted in market dominance by multinationals, manufacturing thei r own products within
African countries generating profits benefitting them and their countries leaving local cigarette
manufacturing companies with a little competitive chance to sell off and export semi -processed
cheap tobacco because of lack the resources to further process the tobacco, this is the case of
Malawi, “despite tobacco being Malawi ’s main export commodity, the country continues to
export semi-processed tobacco to the international market which has over the past years led to
worsening trade balance as total imports value have been surmounting exports value”. J. Smith
(2018), in the conversation article its time for Malawi to quit tobacco,says “Malawi is the most
tobacco-dependent country in the world. In 2015, tobacco leaf comprised 30 to 40 per cent of its total
exports, making up 11 per cent of the country’s gross domestic product and 60 per cent of its foreign
exchange earnings. While tobacco leaf is clearly an important source of foreign exchange earnings at
the national level, most tobacco farmers in Malawi live in poverty”. The production of inadequate
cigarette quantities, ”Currently Malawi has one company Nyasa Manufacturing Company which
produces locally made brand of cigarette in line with the government’s vision of adding value to
Malawi’s Green gold” this is propelled by the existence of primitive economies, for instance
Malawi, according to the African experts Malawi’s economy is purely rural and primarily
agricultural. Raw tobacco dominates Malawi’s export markets, according to the United Nations
Food and Agriculture organization, 81 percent of Malawi’s foreign exchange earnings come from
tobacco farming. This creates a unique context for competition dominance within its
tobacco/cigarette economy. Failing to identify constraints as opportunities e.g. Malawi can
promote the use of snus or vapes with is much cheaper, Kenya can start investing in e -cigarettes.
While Kenya has no laws prohibiting snus or vapes, experts say there is very little public
awareness about the relative risks of different options.
As a conclusion, an establishment has been made of the framework summarizing the decision making
approaches and the organizational challenges within the cigarette and tobacco industry. As presented,
the decision making can be divided into two main approaches, intuition and rationality with or without
creativity. The decision making within this industry comprises three challenges - uncertainty,
complexity and ambiguity - that are related to organizational challenges.

Human Processes in Decision making

When it comes to decision making, humans are not always rational, they can also be intuitive. Intuition
and rationality in decision making are seen as dual processes because they are “parallel systems of
knowing” (Sadler Smith & Shefy, 2004, p. 88). Nobel prize-winner Daniel Kahneman presented the
two processes of human decision making, intuition and reasoning, shown in Figure 1.3 (Kahneman,
2003, p. 698; Johnson, 2017, p. 512). On the scheme, two systems are distinguished, intuition and
reasoning that are the two different processes in the decision making. In this scheme intuition is coupled
with perception as perception helps to build intuition. Kahneman has described both of the system by
assigning them adjectives related to their processes.

Fig 1.3: Processes In two Cognitive systems: Intuition Versus Rationality (Kaheman,2003,p.512)

Intuition is linked to emotions and automatisms learned through experiences; it is a slow learning
process as this process is function of experiences lived and prolonged practices; it is also an effortless
and fast process as humans naturally have intuition (Kahneman, 2003, p. 698). Kahneman linked the
concept of intuition along with the notion of perception and according to him, intuition is a process
stemmed from automatic operations of perception (Kahneman, 2003, p. 697) Those two concepts are
considered to be natural assessments and they are useful in the judgement about what is good or bad
according to the context (Kahneman, 2003, p. 701). In a nutshell, we can summarize the first system as
“automatic, holistic, primarily non-verbal, and associated with emotion and feeling” (Sadler-Smith &
Shefy, 2004, p. 88).

The second process, reasoning also called rationality. Rationality is connected to intelligence, based on
the need for cognition and correlated to statistical reasoning (Kahneman, 2003, p. 711). To sum up, the
second system can be described as “intentional, analytic, primarily verbal, and relatively emotion-free”
(Sadler-Smith & Shefy, 2004, p. 88). If the system 2 - rationality - comes after system 1 - intuition - in
the Figure 6 it is because system 2 has a monitoring role in decision making process; yet it can also
constitute a process by itself without intuition (Kahneman, 2003, p. 699). For example, when people
make a quick decision on the spot, they can start their process with intuition and it is then endorsed by
rationality or they can directly rely on rationality if no intuitive impulse occured (Kahneman, 2003, p.
717).

Artificial Intelligence (AI) decision making processes

Along with the development of AI techniques and applications, organizations are questioning the
influence of AI on human jobs (Jarrahi, 2018, p. 2). Elon Musk considered AI as a disruptive technology
that will replace humans in a broad range of jobs. Thus, AI may be seen as the principal cause of an
unprecedented wave of automation (Jarrahi, 2018, p. 2). Some scholars praise the rise of machines as a
substitution of human decision making since humans are too biased and irrational (Parry et al. 2016, p.
571, 572). The power of computers to analyze huge amounts of data - Big Data -, their objectivity and
their processes based on rules enable them to make decisions based on grounded facts and models (Parry
et al. 2016, p. 577, 580). AI-based decision making systems are free of human preconceptions and
present a better representation of the reality (Parry et al. 2016, p. 577). AI can decide in an autonomous,
unbiased and rational way thanks to ML and algorithms (Dejoux & Léon, 2018, p. 198, 199). Decisions
are already made by machines when to consider high frequency trading (Dejoux & Léon, 2018, p.198).
In an investment fund called Bridgewater, a CEO decided to put an AI at his position to run the
enterprise (Dejoux & Léon, 2018, p. 199).

Within PCC, with processes and computer servers - can potentially assist and complement the human
decision maker especially when they adopt a rational process. A crystallization of commons and PPI
for the decision making is represented by Decision Support Systems, DSS. Alyoubi (2015, p. 278)
defined DSS as “popular tools that assist decision making in an organization” and according to Courtney
(2001, p. 20), DSS are used as knowledge source or ways to connect decision-makers with several
sources. That is why Alyoubi (2015, p. 278) links DSS to knowledge management as knowledge
management helps the decision making process in organizations. Figure 1.4 represents the decision
making process of DSS. DSS start the process with the problem recognition and definition. Then,
following a human rational decision making process. DSS generate alternatives with a model
development in order to choose the best option and implement it.
Fig 1.4: An example of a dss Decision making process (Courtney 2001,p.280)

The most common application in organizations for system supporting decision making is Group Support
System (GSS) or Group Decision Support System (GDSS) which is the convergence of DSS and
knowledge management (Alyoubi, 2015, p. 278; Courtney, 2001, p. 20). Indeed, over the past two
decades, with the development of AI and ES, GDSS have emerged to “provide brain-storming, idea
evaluation and communications facilities to support team problem solving”, i.e. GDSS deliver to the
decision maker a smart support (Courtney, 2001, p. 20). Indeed, Parry et al., (2016, p. 573) qualify
GDSS as decision making processes that attempt to imitate human intelligence. GDSS are described as
systems that “[combine] communication, computing, and decision support technologies to facilitate
formulation and solution of unstructured problems by a group” like IBM’s Watson (Parry et al. 2016,
p. 573). GDSS adopt a rather rational decision making process based on knowledge and unstructured
information. According to Parry, AI is used in enterprises to deal with “routine operational decision
processes that are fairly well structured” but also “Recently, however, there have been indications that
automated decision making is starting to be used in non-routine decision processes that are quite
unstructured” thanks to Big Data, pattern recognition and the objectivity of the machine (Parry et al.
2016, p. 572). In fact, AI can aggregate and analyze more data than humans do. As AI is based on rules
and codes, AI can identify alternatives like humans do in utility theory or in with decision trees but in
a more precise way (Jarrahi, 2018, p. 3).
PARTNERSHIP OF HUMANS AND DSS IN GENERAL DECISION MAKING

According to Kahneman (2003, p. 712), when it comes to making a decision, the dual-task method can
be useful; this method involves validating assumptions of an underlying intuitive decision. A
partnership between humans and DSSes can foster the decision making process. Indeed, other scholars
see systemsas a support for human decision making, as DSSes cannot make a decision on themselves
since they lack intuition, common sense, and contextualization (Jarrahi, 2018, p. 7). DSSes can help to
formulate rational choices (Parry et al. 2016, p. 577). In their decision making, humans have
comparative advantages regarding intuition, creativity, imagination, social interaction and empathy
(Brynjolfsson & McAfee, 2014, p. 191,192; Dejoux & Léon, 2018, p. 206). DSS systems are also
constrained by their codes and algorithms so that they cannot think outside of the box and be creative
and innovative (Brynjolfsson & McAfee, 2014, p. 191; Dejoux & Léon, 2018, p. 206, 211).

Even if some scholars have considered a partnership between AI and humans, Epstein (2015, p. 44)
addresses some limits when considering this partnership on a theoretical level since “Although tales of
human–computer collaboration are rampant in science fiction, few artifacts seek to combine the best
talents of a person and a computer” (Epstein, 2015, p. 44). Consequently, according to Epstein (2015,
p.44), the gap existing in the literature can be explained with the following two main issues: (1) it is
complex to include humans in empirical studies “Because people are non-uniform, costly, slow, error-
prone, and sometimes irrational, properly designed empirical investigations with them are considerably
more complex.”; (2) “the original vision for AI foresaw an autonomous machine. A fact has been
presented that a machine/system that shares a task with a person requires all the behaviors the
Dartmouth proposal targeted, plus one more — the ability to collaborate on a common goal.”

However, other scholars have considered that a partnership between AI and humans could help to
overcome the limits and weaknesses of each other in decision making (Brynjolfsson & McAfee, 2014;
Jarrahi, 2018; Dejoux & Léon, 2018). That is why, based on the framework of Dejoux & Léon (2018,
p. 203) Claudé & Combe (May,2018) presented the interaction between AI and humans in decision
making. In the process of decision making between humans and AI, Dejoux & Léon explained that the
first step consists of explaining the problem to AI (Dejoux & Léon, 2018, p. 202, 203). Then, AI
analyzes a consistent amount of data present in the system thanks to algorithms (Dejoux & Léon, 2018,
p. 198, 199, 202, 203). Stemming from this analysis, AI proposes different patterns to humans and two
options emerge: either AI chooses the pattern and automates the solution by itself or humans choose
one pattern according to their values and objectives (Dejoux & Léon, 2018, p. 202, 203). In a nutshell,
it can be said that AI can be a decision maker or AI can be an assistant in decision making. This process
of decision making between AI and human beings is summarized below a framework translated from
Dejoux & Léon, (2018, p. 203).
Fig 1.5: Process of decision making between AI and humans: AI can be a decision maker or AI can be
an assistant in decision making (framework translated from Dejoux & Léon, 2018, p. 203)

Mélanie Claudé & Dorian Combe, (May,2018) in their research established a continuum describing the
decision making process and the related decision maker in the below figure Intuition and rationality are
the extreme parts of the continuum. They coupled those two indicators with the three types of
combinations of decision makers that they described, humans only, the relationship between humans
and AI, and autonomous AI.

Fig 1.6: Decision maker within the continuum of decision making processes

MARKET ATTRACTIVENESS DETERMINATION STRATEGIES OR MODELS

Market attractiveness is defined by various scholars as a measure of the potential value of a particular
market, B. Simonetti, (September 2017) further says “Market attractiveness is a concept that uses
many factors to determine whether or not a market might be a profitable one for investment. Daniel
Spohn (May,2004) in his research “evaluating market attractiveness”, presented the fact that, the term
market attractiveness stems from the business portfolio planning technique literature, which suggests
that firms should invest in markets with certain attractive characteristics. The one most popular business
portfolio planning technique is the Boston Consulting Group matrix, which classifies businesses
according to the two dimensions of market growth and profitability. In this simple matrix model,
business profitability and market growth are considered independent of each other, and market growth
is applied as the only external determinant for market attractiveness. However, the attractiveness of
markets is influenced by many more factors than market growth. As is shown later in the literature
review, this limitation of the term market or industry attractiveness to one external market factor or a
small number of factors has been very common in earlier research, neglecting the complexity and
diversity of market environments.

Further on, the attractiveness of the market in other literary sources is very closely related, to or even
identified with, the market competitiveness. According to the American Marketing Association
dictionary, the market attractiveness defines the degree of market opportunities provided by a market
segment and a company’s ability to meet the segment’s needs considering the competitive environment.
Meanwhile, the market attractiveness by M. E. Porter (1980) is considered to be closely related to the
competitive situation in the market, i.e. economy competitiveness of companies and the country. M. E.
Porter (1980), based on the five-forces model, argues that an attractive market is the one in which you
can get the maximum profit or benefit, in other words, the more relevant market participants getting on
for ideal competition, the less attractive it becomes. In the matrix of market attractiveness prepared by
McKinsey & Company (1970), each business unit or product is classified in accordance with market
attractiveness and the strength of its competitive position. Also, these two factors are dependent on each
other, i.e. the high market attractiveness directly determines the high market competitiveness (Fig 1.7).

FIG.1.7 The McKinsey market attractiveness–competitiveness matrix

Source: Amatulli C., Caputo T., Guido G., 2011, p. 62.

The GE Mckinsey Model
This model is deemed a marketing strategy and product portfolio analysis tool. “In the 1970s, General
Electric (GE) commissioned McKinsey & Company developed a portfolio analysis matrix for screening
its business units. The GE McKinsey Matrix or GE Matrix is a variant of the Boston Consulting Group
(BCG) portfolio analysis”. The GE McKinsey Matrix also compares product groups with respect to
market attractiveness and competitive power. Another name for this type of analysis is portfolio
analysis. The portfolios of businesses consist of all combinations of products and/ or services that are
offered to the market/ target groups. Originally, the GE McKinsey Matrix made an analysis of the
composition of the portfolio of GE business units. Later, the GE McKinsey matrix proved to be very
useful in other companies as well.

The GE McKinsey Matrix comprises two axes. The attractiveness of the market is represented on the
y-axis and the competitiveness and competence of the business unit are plotted on the x-axis. Both axes
are divided into three categories (high, medium, low) thus creating nine cells. The business unit is
placed within the matrix using circles. The size of the circle represents the volume of the turnover. The
percentage of the market share is entered in the circle. An arrow represents the future course for the
business unit.

With the GE Mckinsey matrix, it is possible to determine whether a market is attractive enough to enter.
This can be done through the use factors such as market size, historical and expected market growth
rate, price development, threats and opportunities (component of SWOT analysis),technological
developments and degree of competitive advantage. Further on competitiveness in a specific market
can also be determined through value of core competences, available assets, brand recognition and
brand strength, quality and distribution, and access to internal and external finance resources.

The matrix is said to adopt three different strategies, which include invest or grow (growth is facilitated
by expanding the market or making investments), hold (by making careful investments, the current
market is consolidated) and harvest or sell (which adopts a no extra investments strategy but mainly
focusing on maximising returns by assigning a weight to each factor, the GE Mckinsey Matrix can be
used more effectively. Based on weights, the scores of competitiveness and market attractiveness can
be calculated more accurately for each business unit).

The MABA Analysis

It is also classified as a portfolio analysis which stands for market attractiveness business position
assessment. “A MABA analysis compares the relative market attractiveness (MA) of a business activity
or product–market combination with business attractiveness (BA), as determined by the ability to
operate in a specific product–market combination. The MABA matrix is a useful tool to assess strategic
options and help determine which option is the preferred one for the organization.”, says Pietersma and
Van den Berg (2015).

How the analysis works:

The MABA Analysis consists of two axes which form 9 cells. On the horizontal axis stands the
competitive position. This is made up of factors that determine the competitive power of a product-
market combination. Choose the relevant factors for this, rate these with a number and a weighting
factor. On de vertical axis stands the market attractiveness. For this also, relevant factors that influence
the product-market combination need to be chosen. Also rate these factors with a number and a
weighting factor. This should be as what can be seen in the following:

Competitive Position:

Remark: Choose your own factors that are important for the product-market combination. The total
weight must always amount to 1 . Valuation always up to the scale of 1 up to 5. The input for the model
is the total value of the "score" column.

Market Attractiveness
Remark: Choose your own factors that are important for the product-market combination. The total
weight must always amount to 1. Valuation always up to the scale of 1 up to 5. The input for the model
is the total value of the "score" column.
The different product-market combinations are set in the model based on the scores

Fig 1.8

Source:
https://www.google.com/search?q=maba+analysis&rlz=1C1GCEU_enZW820ZW820&source=lnms
&tbm=isch&sa=X&ved=0ahUKEwjJvs_m3eHjAhUUDmMBHahSBYUQ_AUIESgB&biw=1366&bih
=576#imgrc=GjsNp6pggq8-UM:

The summary could conclude that market attractiveness , although approached differently by various
authors, has the general feature – usually related to the company’s entering into a new and unknown
market and closely associated with the market competiveness. See table below:
Author Year The main characteristics of
market attractiveness
Y. Azarian 1998 Measured on the basis of the
effect of the external market
environment factors on
business.
J.X. Hammond, G. B. Allan H.J. 1975 1983 Market growth – the only
Pleitner external factor affecting the
attractiveness of a market.
Marketing dictionary 1995 A measure of the profit
potential inherent in the
structure of a market or
industry.
Business dictionary 2011 Market possibilities
provided for the enterprise to
meet the needs of the customer
according to the competitive
environment.
M. E. Porter 1980 Attractiveness is related to the
general profitability of the
sector. An uncompetitive
market is an unattractive
market.

McKinsey & Company 1970 Market attractiveness depends

directly on market
competitiveness

T. Baaken 1989 Market attractiveness and

competitiveness are
interdependent and inseparable
Source: adopted from the paper “ANALYSIS OF THE ATTRACTIVENESS AND COMPETITIVENESS
OF THE SECURITIES MARKET IN LITHUANIA”, ISSN 1392-1258. EKONOMIKA 2014 Vol. 93(3)
(journal)

Factors influencing Market attractiveness in general and in the tobacco/cigarette

manufacturing industry

Companies or investors considering their opportunities and feasibility of entering a new market perform
the analysis of market attractiveness in order to determine whether the entrance into a particular market
is profitable and how much it could make (Porter, 1980). However, for assessing the market
attractiveness, it is necessary to identify the main factors influencing it. According to the marketing
term dictionary, the main factors of market attractiveness are composed of four dimensions: market
factors such as marketing growth rate, market size, and lifetime stage; economic-technological factors
such as the intensity of investment, industry profitability, barriers to enter or leave the market, and the
access to raw materials; competitive factors such as the types of direct competitors, competition
structure, substitute risk, the power of negotiation between suppliers and buyers; environmental factors
such as legal climate or regulation, the degree of social acceptance, and the human factor. The M. W.
Peng (2009) factors influencing the market attractiveness are also divided into four groups: market size
and growth rates, institutional contexts, the competitive environment, and the cultural, administrative,
geographical, and economic distance (Fig.2 ). Most important are the market size and growth rates.

Source: compiled by author according to Peng, 2009, p. 51 fig 1.9

Khanna, Palepu and Sinha (2005) have developed a five-dimensional system which allows the
attractiveness evaluation of a particular country or region according to the institutional context. They
state that a country’s political and social system, market openness, labour market, product market, and
capital market influence the company’s ability to successfully enter a particular country and compete
in it. From their point of view, the most important aspect is the political system of the country: an open
country gives a possibility for market participants to develop their business freely and effectively. The
second place according to the importance is the competitive environment: the number of competitors,
the market size and quality.
M.W. Peng (2009) states that the country’s cultural, administrative, geographical and economic
distances are very important and broadly interpreted. Differences among religious, races, social norms
and languages can make the cultural distance. These differences can quickly become the barriers for
entering the market. Meanwhile, the administrative or political distance is created by differences among
valid laws, politics, and institutional rules including international relations among the countries,
contracts and membership in international organizations. Geographical distance can be defined as the
simplest, i.e. it is the distance in kilometres in which the countries are away from each other. The other
features attributed to the geographical distance are the physical size of the country, the average distances
to the country’s borders, access to the sea or the ocean, topography, the country’s transport and
communication infrastructure. Economic distance is determined by a disposable income which creates
the largest distance among the countries.

R. J. Best (2005) has divided all the factors influencing the market attractiveness into three groups:
market factors, the intensity of competition, and entrance in the market (Fig. 1.10). Market size, growth
rate, and the power of the buyer are attributed to the market factors as very important as they are the
initial data which are being analyzed before entering a new market and have a significant influence on
the final decision. Meanwhile, the competition intensity is calculated in terms of price rivalry, the
substitute, and the simplicity of entering the market, i.e. the existing market barriers, legal regulation,
etc. The third factor – the entrance to the market – consists of knowing the customers, strategies of
products and prices, and access to the channels, i.e. access to suppliers, raw material, capacity and
potential of sales (Best, 2005).

The Kotler’s (1997) approach is similar because market attractiveness is defined as the weighted
arithmetical average of factors. The most important is the total size of the FIG. 1.9. Factors influencing
the market attractiveness Source: compiled by the authors according to Peng, 2009, p. 51. Market
attractiveness Market size and growth rates Cultural, administrative, geographic and economic distance
Institutional contexts Competitive environment 121 market, the market growth rate, profit margins, and
competition intensity. The choice of the factors’ list and especially their weights are a strategic decision
of the company and varies depending on the internal policy of the company. For example, a big weight
attributed to the market growth factor is usually selected by the companies which focus on innovative
markets. On the other hand, considerable attention to the past profit margins can be a disadvantage to
the company focused on the innovation of products or technology that may turn out to be necessary for
a successful future activity (Kotler, 1997).
Although the factors influencing market attractiveness by various authors are categorized differently,
the principles remain the same. Also, the attractiveness of the market according to the authors analysed
are almost inseparable from the market competitiveness.

FIG. 1.10. Factors influencing market attractiveness

Source: compiled by the authors according to Best R. J., 2005.

PARTNERSHIP OF INTUITION AND DSS IN ESTABLISHING MARKET ATTRACTIVENESS

With regard to understanding a market’s needs, competitors’ strategies, and to obtain information for
decision making, it is imperative to do market research. Many organizations rely heavily on employees’
use of computers, intranets, and the internet for market research and decision making. In fact, much of
the credit for the widespread use of knowledge management theories and practices must go to the
development of the worldwide web because the internet has made the world increasingly smaller in its
short history (trend 2010).Today, businesses act in a changing and turbulent environment and they have
to breast challenges such as the development and distribution of new products and services according
to customer needs. The current developments in Information Technology (IT), permit businesses to
limit uncertainty since they can acquire decision making information not only quickly but effectively
as well.

Marketing scholars have long considered how managers make marketing decisions to be an important
stream of research. Studies that have specifically examined managers’ decision-making processes and
decision characteristics within the marketing context include Bauer and his colleagues’ (2013)
examination of the use of adaptive heuristics in managerial decision making in the context of customer
management and Tse and his colleagues’ (1988) study of the effect of managers’ home country cultures
on their decision choices, decisiveness, and risk adjustments. Marketing scholars agree that managerial
decision making in marketing is important because it affects the likelihood of success for any marketing
strategy (e.g., AtuaheneGima and Murray 2004; Burke1984; Glazer and Weiss 1993; Menon et al. 1999;
Menon et al. 1996; Schmidt and Calantone 2002). Despite noteworthy past research on managerial
decision making, how managers actually go about making marketing decisions remains an
underdeveloped research stream (Goldfarb et al. 2012; Slotegraaf and Atuahene-Gima 2011;
Wierenga2011). The reason for this is because as a field, marketing scholars often treat managers as
consumers of marketing research as opposed to the subject of research (Wierenga 2011). Consequently,
the vast majority of studies on marketing decision making are normative in nature, emphasizing
prescriptive decision models and tools for how managers should make marketing decisions, rather than
investigations of how managers actually approach and make these important decisions (e.g., Curren et
al. 1992; Wierenga2011).

In many situations the quality of decisions is important, hence aiding the deficiencies of human
judgment and decision making has been a major focus of science throughout history . More recently,
these methods, often enhanced by a variety of techniques originating from information science,
cognitive psychology, and artificial intelligence, have been implemented in the form of computer
programs(decision support systems), either as stand-alone tools or as integrated computing
environments for complex decision making Gaily (,2016).

Little (1970) defines DSS as a “model-based set of procedures for processing data and judgments to
assist a manager in his decision making”. Keen and Scott Morton (1978), add on by stating that
“Decision Support Systems couple the intellectual resources of individuals with the capabilities of the
computer to improve the quality of decisions. It is a computer-based support system for management
decision makers who deal with semi-structured problems”; Clarity is further given by Mann and Watson
(1984) who state that “a decision support system is an interactive system that provides the user with
easy access to decision models and data in order to support semi-structured and unstructured decision-
making tasks”; Bidgoli (1989) then defines or outlines the basic composition of a DSS system “a
computer-based information system consisting of hardware/software and the human element designed
to assist any decision-maker at any level. However, the emphasis is on semi-structured and unstructured
tasks”.Sauter (1997) finally notes that DSS are computer-based systems that bring together information
from a variety of sources, assisting in the organisation and analysis of information and facilitating the
evaluation of assumptions underlying the use of specific models.

Decision Support Systems (DSS) are systems which content decision making in planning, problem
solving and decision tasks. Market expansion (through the determination of market attractiveness) can
be classified as a strategic decisions which is typically associated with issues such as the long-term
direction of the business, the mission of the business, the competitive advantage, the strategic fit with
the business environment, the business’s resources and competencies.
An important message of the research literature, which is widely accepted, is that the
technology itself is unlikely to be a source of sustainable competitive advantage. To succeed
in competitive advantage from the strategic use of IT, maintenance by managers and alignment
between the business strategy and the strategy of Information Systems (IS) are needed.

Hence, after the definition of business goals, and the environmental analysis, managers can use
DSS to make decisions based on previous scenarios or based on the criteria which DSS
proposes in consideration of both internal and external factors. To which they can select the
most suitable alternative strategic scenario to be implemented and after its implementation they
can evaluate it with the support of DSS.

DSS SUPPORT SYSTEMS IN THE TOBACCO INDUSTRY

Tobacco industry strategies to subvert scientific knowledge
The release of previously secret internal tobacco industry documents as a result of the Master
Settlement Agreement in 1998 has given the public health community insights into the tobacco
industry's motives, strategies, tactics and data (Bero,2003). These documents show that for
decades the industry has been motivated to generate controversy about the health risks of its
products. They have also revealed that the industry was concerned about maintaining its
credibility as it manipulated research on tobacco (Bero, 2003).

The strategies used by the tobacco industry have remained remarkably constant since the early
1950s. During the 1950s and 1960s, the tobacco industry focused on refuting data on the
adverse effects of active smoking. The industry applied the same tools it developed during that
period when it subsequently refuted data on the adverse effects of second-hand smoke exposure
during the 1970s through the 1990s.

Further on a variety of studies show that the tobacco industry sponsorship of research is
associated with outcomes that are favourable for the industry (Lexchin et al., 2003; Barnes and
Bero, 1998; Barnes and Bero, 1997). Many researchers have also stipulated that one possible
explanation for this bias in outcome is that industry-sponsored research is poorly designed or
of worse 'methodological quality' than non-industry-sponsored research. However, there is no
consistent association between industry sponsorship and methodological quality (Lexchin et
al., 2003). More so, technological and modelled research for decision making in the tobacco
industry is said to have oftenly be applied in a reverse engineering manner. With companies
like Philip Morris developing a “PM program to affect legislative decisions”. This program is
said to have been aimed at influencing legislative decisions through direct contact and special
constituents, so as to loosen tobacco tax and laws levied against the tobacco industry. This
program was launched targeting and influencing stakeholders such as the USA government,
USA media affairs, USA communication. It was done to ensure that cigarette and tobacco
companies paid lesser taxes and faced lesser restrictions in terms of advertising and the
distribution of their product brands and other laws, hence keeping stable and growing profits
for themselves. This is evident in the facts presented by Hyasom (March,2019 ) in his research
article, the illicit tobacco trade in Zimbabwe and South Africa: Impacts and Solutions
“Academic and civil society observers of the tobacco market claim that for several years since
2006 the large multinationals deliberately exaggerated the size of the illicit market as a way to
lobby against rises in excise duty, which the South African government was pursuing to bring
its policy into line with international recommendations and to curb rates of smoking.55 An
industry group called the Tobacco Institute of Southern Africa (TISA) blamed the purported
high and increasing level of illicit trade on the excise tax, which they claimed increased the
incentive for criminal actors to enter into the tobacco trade and harmed the market position of
multinationals. These claims follow a global pattern which has seen multinational tobacco
companies use the issue of illicit tobacco to lobby government to lower taxes.”

Turning to market expansion and market dominance strategies used in the tobacco industry. In
most developed countries, businesses use a broad variety of marketing techniques to increase
their sales, gain market share, attract new users, and retain existing customers. These
techniques include product design, packaging, pricing, distribution, product placement,
advertising, and a variety of promotional activities. Tobacco companies were among the
earliest companies to identify and implement effective, integrated marketing strategies, and
cigarettes and other tobacco products have long been among the most heavily marketed
consumer products in the United States (Brandt 2007).This has also been seen to have been
applied world over, including Africa. In the late nineteenth century, James Buchanan Duke
used the cost advantages he gained from his adoption of James Bonsack’s mechanized cigarette
rolling machine to aggressively market his cigarette brands (Chaloupka 2007). Duke’s
marketing practices included setting relatively low prices, providing sophisticated packaging,
carrying out promotions such as including picture cards in cigarette packs and sponsoring
various public events, and paying distributors and retailers to promote his brands (Kluger
1996). These strategies contributed to the growth of Duke’s American Tobacco Company,
which came to dominate U.S. tobacco markets in the early twentieth century before antitrust
actions dissolved the trust in 1911. Despite the breakup of the trust, U.S. markets for tobacco
products have remained highly concentrated, with little price competition. Even so, variations
of many of the marketing practices used by Duke continue to be important marketing tools for
today’s tobacco companies such as the Chineese JTI company. These tools are said to be
effective for those companies that have already captured the tobacco/cigarette audience,
whereas for companies like Pacific Cigarette Company the chance left, is for them to identify
markets which are lacking, as marketing strategies may prove to be ineffective in an audience
already loyal to another product brand. Hence the need to identify un-ventured and attractive
markets has to be done. According to the company’s market venturing records, the below are
the main sources of consumer volume information used in trying to determine the company’ s
success in current markets and in the determination of chances stood in newer markets:

 Factory to Trade shipment records

External:

 National Manufacturing Associations data

 Published Statistics

 Consumer surveys (GCS/Oracle Tracker)

 Retail audit

 Retail information

 Pack Counts

Calculating market share, analysis of market share trends, using retail audit and general
consumer surveys.

According to Peixoto, Golgher, Cyrino (May, 2017), top level managers need information so
that best possible strategic analysis and choice can be achieved. A strategic analysis
information system (IS) can be used to collect this information. Moreover, in the process of
collecting information for the strategic analysis, information systems (IS) not only collect
information but also support the decision making. This can be achieved when businesses select
the right strategy. A computer based system that can be used to maintain decision making is
named Decision Support System (DSS).

DSS in strategic management contain environmental analysis of gathering internal external

information, definition of goal settings such as mission purpose, goals, and objectives and the
architecture of DSS such as Data Base, application programs and Data models. Also it includes
the strategy formulation, the strategy evaluation and choice, and the strategy implementation
planning and control. Many definitions have been recommended for DSS. DSS is an
interactive, flexible, and adjustable system which uses decision rules, models, and model base
with a comprehensive database as well as the decision maker's own insights. These ingredients
lead to concrete, implementable decisions in solving problems. DSS is of great help when it
comes to complicated decision making. Except for the importance of DSS, business’s strategic
position is based on industry attractiveness, competitive position and profit .Another definition
for DSS is that DSS is a popular tool of IS that supports decision making processes Peixoto,
Golgher, Cyrino (May, 2017) add to this by giving the fact that “DSS is a popular tool of IS
that supports decision making processes.”

DSS are said to contain technology components which are used to support problem solving and
decision making. Decision Support capabilities are affiliated to provide and process internal
and external data, information, and knowledge. Also they support the modelling of functions
approached by a model management system, and the design of a simple user interface that
supports interactive queries, reporting, and graphing functions.

There are some benefits derived from the use of DSS. DSS support decisions in each phase of
the decision process. These systems provide information to businesses in order to improve
communication, to make more effective and rapid decisions and to redesign organization’s
structure. Businesses have the opportunity to design new products and services according to
customers’ needs, to introduce them in the market more quickly and to decide which processes
need to be redesigned, in order to support the results of their decisions Peixoto, Golgher, Cyrino
(May, 2017) et al.

Peixoto, Golgher, Cyrino (May, 2017) present three general phases to any DSS functionality:
identification, development, and selection. In the first phase, the recognition of problems,
opportunities, and crises is being developed. Then the collection of the needed data or
information follows to identify and illustrate the previously recognized problem, opportunity,
or crisis. In the second phase, the decision team engage miscellaneous activities to investigate
possible solutions to the recognized problem. Solutions previously determined are proposed to
fit to a specific problem situation. If the proposed solution is not appropriate, a new alternative
one is suggested. Eventually, in the third phase, the best alternative solution is selected through
the process of the evaluation of each solution. Consequently, the steps of the DSS
implementation are the formulation of environmental threats and opportunities, the modelling
of alternative solutions, the implementation of the final plan and its evaluation

Conclusion
Conclusively, this chapter proposes a framework which combines both the intuitive concept of
decision making and a DSS, based on models researched, which highlight on the essence of a
DSS to complement them. Furthermore, this paper bridges the gap in the literature regarding
the relationship between the intuitive concept and DSS in decision making with regard to the
determination of market attractiveness in the tobacco industry. It also contributes to the
development of a new framework of decision making. Based on these facts the researcher will
adopt the MABA analysis model, alongside an intuitive and data driven DSS, for decision
making. Assisting in the achievement of the business’ strategic objective of new market
ventures and being number two in Africa by 2020.