Final answer:
The answer is 'resource allocation,' which includes tangible resources such as buildings and equipment and is a major part of strategy decision categories. A cost/benefit analysis is often utilized to weigh the marginal costs and benefits of such an allocation to make strategic investment decisions.
Step-by-step explanation:
The blank in the student's question should be filled with the term resource allocation. Resource allocation is one of two major decision categories addressed by a strategy. It involves the distribution of tangible resources, which can include buildings, equipment, and computer systems. When making these decisions, firms often assess the potential costs and benefits associated with the investment. This is where a cost/benefit analysis comes into play, providing a structured approach to compare the sacrifices and gains of a decision. It weighs marginal costs, the extra cost of adding one more unit, against marginal benefits, the extra benefit of adding the same unit. The use of a T-shaped chart helps to visually contrast costs on one side and benefits on the other. Approaching decisions with this analytical tool aids businesses in choosing investments wisely, aiming for long-term gains over upfront costs. Firms may raise financial capital through various means to fund these strategic investments, which are critical to their future operations and growth.