Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis Case Solution

The Harvard Business Review published a case study that primarily focuses on Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis. The following case solution has been designed to give the reader an overview about the business world along with a clear understanding of its growth dynamics. Recently, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been subjected to strategic as well as managerial problems that require immediate attention so that they can be resolved to allow future growth, expansion, and competitive edge within the marketplace. This case study solution is being written to provide a strategic solution to Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis using various appropriate tools and frameworks. Harvard Business Review’s case studies involve a central problem that is faced by a particular company. The problem identified involves strategic and managerial implications for the company. Therefore, it is important for readers to critically identify the problem Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis faces. Moreover, it is also essential to highlight the key stakeholders that are impacted and influenced by the problem identified.

External Environmental Analysis

The external environment holds significant importance for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to ensure that the company is able to respond to all the changes in the macro-environment. This is because Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis cannot control the factors and thus can directly influence the company's operations (Indris & Primiana, 2015). The external environment of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis will be assessed using PESTLE Analysis.

Political

• A stable political environment provides a favorable market growth trend for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis.

• It is important for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to analyze the pressure groups, and social environment activists. The company can make close collaborations with these groups to achieve company goals (Wang, Wang, & Shi, 2022).

• High restrictions on trade and high levels of taxes can contribute to the complex business environment for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis by impacting imports and exports.

Economic

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can benefit from wide-range opportunities in business growth by operating in developing economies (Munro, 2017).

• High GDP can determine the long-term growth strategies of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis, signaling the ability of consumers to spend on more products.

• Higher rates of interests can provide Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis with more investment opportunities.

• The flexibility in the labor market allows Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to take advantage of higher workforce productivity.

Social

• The selection of appropriate demographic segments has allowed Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to select the right segments of the market that have high growth potential.

• The research on gender roles has helped Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to develop and align communication as well as marketing strategies accordingly.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been successful in understanding the norms and cultures of different countries by developing local teams and partnerships (Hueske, Endrikat, & Guenther, 2015).

Technological

• The adoption of innovative marketing techniques that involves communication technologies has allowed Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to collaborate successfully with consumers.

• The company has stayed ahead in the market, and can significantly increase its market share by placing its major focus on emerging technologies (Akpoviroro & Owotutu, 2018).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should maximize its profits by investing in disruptive technologies.

Environmental

• It is crucial for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to adopt effective waste management practices to reduce environmental pollution (J. K, W. J, & D., 2016).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should adopt eco-friendly products to establish better relationships with the stakeholders.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can take advantage of subsidies offered in renewable technologies to achieve the long-term goal of sustainability.

Legal

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should follow proper laws concerning employee health and safety, and anti-discrimination laws to effectively develop HRM.

• Consumer protection laws are also important for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis as it involves the consumer protection from fraudulent marketing (S. Samusenko, S. Plaskova, & A. Prodanova, 2020).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can gain a competitive advantage, and can position itself strongly in the market by protecting intellectual property laws.

Porter’s Five Forces Analysis

Threat of New Entrants

• It is difficult to achieve economies of scale in Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis’s industry, making it a weaker force for new entrants.

• There are high capital requirements in the industry. This makes it difficult for new businesses to set up their companies, and compete against Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis.

• The industry has a strong product differentiation, and heavy investment is needed for customer acquisition. Thus, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can focus on innovation to differentiate itself from its competitors (H. Th. Bruijl, 2018).

• There are strict legal requirements to join the industry in which Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates, making it difficult for new entrants to enter the market.

Bargaining Power of Suppliers

• The bargaining power of suppliers in the industry is weak.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates in an industry with a higher number of suppliers. This means that suppliers do not have much control over their prices.

• Standardized products that have low switching costs are provided by suppliers allowing buyers like Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to easily switch their suppliers (Fabbri & F.Klapper, 2016).

• Raw materials can be purchased at lower prices by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis. The company can also switch suppliers for more reasonable pricing.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can benefit from a variety of suppliers as it can have multiple suppliers for its various geographical areas (Cho, Ke, & Han, 2019).

Bargaining Power of Buyers

• The bargaining power of buyers in the Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis industry is weak.

• There is a high product differentiation in the industry, making it difficult for buyers to switch to alternative firms.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can come with differentiated and innovative products to attract more buyers of the industry (Zhao, Zuo, & Wu, 2016).

• Buyers of this industry has low incomes. This means they prefer to purchase items at lower prices, making them more price sensitive. Organizations like Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can offer lower prices to attract customers.

Threat of Substitute Products or Services

• There are few substitute products available in the industry in which Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates.

• Expensive substitutes are available in the industry of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis, making it difficult for buyers to switch to those substitutes (Aithal, 2016).

Rivalry Among Existing Firms

• The rivalry among existing firms is moderate to weak.

• There are few competitors in the industry in which Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates.

• A large market share is enjoyed by fewer firms in the industry. This means that more competitive actions will be made to become leaders in the market (Seema, 2016).

• The industry in which Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates has highly differentiated products, making it difficult for companies to win each other customers.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can focus on making more differentiated products to gain a strong competitive edge in the market (Zhao, Zuo, & Wu, 2016).

Internal Environmental Analysis

Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can use internal environmental analysis to identify and evaluate the competitive positioning of a company in the business environment. This involves conducting a SWOT Analysis that can help Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to identify the company’s internal strengths, weaknesses, opportunities, and threats (Halmaghi, Iancue, & Băcilă, 2017).

SWOT Analysis

Strengths

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a strong distribution network that has allowed it to make its products available to large customers within the given timeframe.

• A strong presence on social media platforms has allowed Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to have a high level of customer engagement (Rizaldi, 2015).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been successful in building a large product portfolio, so unique and distinctive products can be offered to consumers.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a strong brand image in the market.

• A low-cost structure of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has allowed it to manufacture products at lower costs, so they become affordable for consumers to purchase.

• The financial position of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is strong as the company has generated higher profits over the past years (Phadermrod, M.Crowder, & B.Wills, 2019).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has invested in the training and development of its employees to keep them motivates, leading to higher efficiency and productivity.

Weaknesses

• The expenditure of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis on its research and development is comparatively less to other competitors of the market.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis uses a centralized decision-making process that takes time and reduces operational efficiency (Ahmadi, Dileepan, & K. Wheatley, 2016).

• There are high rental costs because Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates on more of the rental properties rather than purchasing them.

• There is no workforce diversification in Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis. This makes it difficult for the employees to adjust with the different workers who belong to different backgrounds.

Opportunities

• Since the online shopping has increased significantly, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can take it as an opportunity to expand its online presence.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can make use of social media platforms to market its products, with more customers interactions.

• Due to more technological developments, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can make its operations more automated so that overall company costs can be reduced (Ahmadi, Dileepan, & K. Wheatley, 2016).

• Globalization provides an opportunity to Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to expand its operations in multiple countries.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can enter in a niche market and sell distinctive products to gain a competitive advantage.

• The increase in the demand of environmentally friendly goods, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis, can place its major focus on making such products (E.Quezada, A.Reinao, & I.Palominos, 2019).

Threats

• In recent times, there has been an increase in the bargaining power of suppliers, making it difficult for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to buy raw materials at lower costs.

• Numerous players are entering the industry, posing a major threat to Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis.

• There has been constant pressure on Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to conduct frequent research to understand the changing customer tastes and preferences (Kolbina, 2015).

• Technological advancements require workforce training. This adds to the costs of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis.

VRIO Analysis

Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis uses VRIO Analysis to assess and evaluate the company resources to determine the competitiveness, and strategic advantage.

Valuable

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a strong brand image and engages in corporate social responsibility.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a high brand recognition because of the quality of products it offers to its customers (Ariyani & Daryanto, 2018).

• The distribution system of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is valued all round the world. The company has been able to successfully establish strong relationships with its suppliers.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis focuses on continuous innovation in its business. The company has expanded this innovation in its multiple functional areas.

• There are potential growth opportunities in the market, and Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been able to penetrate the market through its ability to raise large funds.

Rare

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates globally. This global presence has allowed the company to increase its customer base (Miethlich & G. Oldenburg, 2019).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has an organizational culture that promotes more teamwork, innovation, and creativity among its employees, that leads to a competitive advantage.

• Since Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a global presence, it allows the company to easily adapt to different cultures, norms and values.

• The risk-taking ability of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is strong. This provides more opportunities to the company to penetrate different markets.

Inimitable

• The inimitable resource for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is its high-quality products. These products have allowed consumers to make repeat purchases.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis operates through multiple locations of stores in different companies, allowing easy access to products.

• Strong marketing communications have been used by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to attract more customers.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been using integrated technology that has allowed it to offer competitive pricing to its customers (Ariwibowo, Saputro, & Haryanto, 2021).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis maintains an excellent customer service that has enabled it to have a high brand engagement.

Organization

• Strong financial position has allowed Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to explore more product development opportunities.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is successfully maintaining the efficiency and effectiveness of its business operations with the help of more integrated and advanced technology.

• Employees are given both in-house and off-the-job training opportunities by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis that allow more skills development (Adnan, Abdulhamid, & Sohail, 2018).

• The strong value chain and distribution network has enabled Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to increase its revenue through the sale of its products.

Marketing Mix

Marketing Mix is needed by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to formulate effective strategies to achieve the company objectives.

Product

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has five product categories. Each of these categories has a product line that involves more variety of products (Išoraitė, 2016).

• Highly differentiated products are offered by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to its customers. These distinctive products are not easily available at competitors.

• The products of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis are of higher quality, and thus, customers pay more prices for these products.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis designs products with traditional designs giving customers more product variety.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis offers multiple sizes for its every product to make it easy for its customers to select the right product.

• Warranty and same-day delivery option if also provided by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to its customers.

Price

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis follows a competitive pricing strategy.

• To attract more customers, bundle pricing has also been used by the company.

• Little higher prices are charged for products that are sold online because of the delivery costs (Thabit & Raewf, 2018).

• Optional product pricing strategy is also adopted by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis for some of its products, such as a base product is offered for a certain price, and there are separate prices for its accessories.

• Regular promotional prices are also offered by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to its customers.

Place

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis uses two channels for its product distribution. This includes online selling and through own stores.

• There are more than multiple stores owned by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis globally. This ensures easy product availability to customers (Pogorelova, Yakhneeva, & Agafonova, 2016).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has partnered with delivery service companies to distribute its products effectively to consumers.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has also adopted an omni-channel distribution system.

Promotion

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis uses a traditional promotional strategy that involves TV advertisements (Fan, Y.K.Lau, & Zhao, 2015).

• Social media advertisements are also adopted by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to increase brand awareness.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis takes part in various events and exhibitions as a way of promoting its products.

• Large sales force is used to provide the customers with a more personal experience.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis also makes use of influencer marketing to increase the demand for its products.

• Regular content and deals are posted on the social media pages of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to attract and retain customers.

Value Chain Analysis

Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can use Value Chain Analysis to identify and assess inter-relationships as well as interdependencies.

Primary Activities

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis’s primary activities involves the production and selling of products to the final consumers (Mintz, J.Gilbride, & Lenk, 2021).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has a strong relationship with the suppliers. This ensures that the product is received, stored, and distributed in a timely manner.

• Operational activities of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis are effectively aligned.

• For inbound logistics, after the arrival of raw material, the company processes it to manufacture the final product (Hasan, Nekmahmud, & Yajuan, 2019).

• In terms of outbound logistics, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been able to set up optimal costs as well as efficient delivery processes to deliver the product on time.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis invests in its sales and marketing activities to build relationships with customers.

• Marketing funnel approach is used by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to effectively devise and build sales and marketing activities.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis offers both pre-sale and post-sales services to its customers.

Secondary Activities

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has an effective infrastructure that has allowed the company to successfully optimize its value chain.

• The competitive pressure in terms of employee skill development, motivation, and commitment is reduced as Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has developed a strong HRM (Linkov, Carluccio, Pritchard, & Bhreasail, 2020).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis uses a cost minimization approach to reduce its costs by analyzing the costs associated with training and hiring the employees.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis has been using integrated technology in its value chain activities. This includes technological customer support, research and data analytics concerning product design, and automated software.

• The procurement activities of Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis are effectively optimized with its inbound, outbound, and operational activities (Maheswari, Yudoko, & Adhiutama, 2019).

Market Penetration Strategies

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can increase the capacity of its production so it can reach more of the customers in its existing market.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can focus on controlling the overhead costs so that it can offer competitive pricing that can attract customers of the market (Dawes, 2018).

• Investments can be made by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis in marketing and sales activities to increase the chances of successful market penetration.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can design and develop a content that increases customer engagement within a particular marketplace.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can assess and identify more enhanced distribution networks (Radpour, Mondal, & Kumar, 2017).

• Improved distribution systems and supply chains can improve the product accessibility for the customers, making it easier for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to penetrate the market.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can adopt price cuts in its products to compete in the market. This will give a company a competitive edge over its competitors.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can plan strategies where it can focus on acquiring the leading players of the market. Such acquisitions will give the company an opportunity to reach more customer segments.

• Strategic partnerships and joint ventures agreements can be signed by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to mitigate the risk factors, and to gain customer groups of the market.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can come up with new and innovative features in its already existing product for the market (Daouda, Barth, & T. M. Ingenbleek, 2019).

Market Development Strategies

• It is important for Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to invest in the research and development department so potential markets can be identified (Hilman, Bohari, & Abdullah, 2018).

• Regional expansion strategy can be used by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis for growth purposes. This will also take into consideration the cultural differences.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should also consider to expand its business operations in the international market. This will allow access to a larger customer base.

• New customer groups and segments should be explored by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should also invest in brand-building activities as it will give an opportunity to reach more potential customers (C. Koks & M. Kilika, 2016).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should consider the market education in terms of its product. The company can significantly increase its sales by giving product awareness to new segments.

Product Development Strategies

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can come up with new improvements and modifications in the existing products to attract the market.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should undergo the NPD process, so the company is able to assess and identify new points for its customers.

• Regular investments in the research and development will help Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis to develop something new and innovative that can give a competitive advantage (Kalogiannidis & Mavratzas, 2020).

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can develop new products by getting into more strategic partnerships.

Diversification Strategies

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can adopt vertical diversification to develop business. This can be done by adding more products to the existing portfolio (Kalogiannidis & Mavratzas, 2020).

• Horizontal integration can also be adopted by Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis, where the company can enter into a completely new product development phase that does not exist in the current product line.

• Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis can also consider to conglomerate by starting a different business.

Conclusion

Based on all the models and frameworks discussed above, it is concluded that Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should focus on widening the existing product portfolio. Moreover, the psychological pricing strategy can be adopted. Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should also maintain close relationships with its suppliers to benefit from lower prices. Similarly, Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis should develop more integrated outbound logistics for its perishable items. It is also important to continue producing quality and innovative products, so Examining Financial Risk Tolerance via Mental Accounting and the Behavioral Life-Cycle Hypothesis is less affected by the new emerging competition in the industry.

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