Database Reference
In-Depth Information
TABLE 2.2
Competitive-Strengths Matrix
Competitive Areas
Sales &
Marketing
Corporate
Culture
Competitor
Product
Manufacturing
Finance
Management
Company A
5
3
4
2
4
3
Company B
4
4
3
2
3
4
Company C
1
3
3
5
2
3
Company D
4
4
4
4
5
4
Note:
1 = Weak to 5 = Excellent.
cells. The worst score for each competitor should be highlighted.
This is their weakest point and should be monitored accordingly.
In our example, Company A and Company B are both weak in the
finance area. This means that they do not have enough strength to
launch a major advertising campaign to bolster a new product. What
this means is that if the company doing this analysis is ready, willing,
and able to spend a lot of money, a new product launch would most
probably be successful.
Company C scored a 1 in the product category. This means that
its product is not as good as the company doing the analysis. In this
case, an advertising campaign emphasizing product differences
would serve to grab some market share from Company C.
Company D, on the other hand, scored strongly in all matrix
areas. Given a strong product and an aggressive management team,
this company is likely to make an aggressive move—perhaps a new
product launch or major advertising on an existing product. It might
even reduce costs. Company D certainly bears watching.
Company C, on the other hand, has a weak product but a good
financial position. It just might launch a new product. However, its
weak management structure might defer any product launch.
In summary, upon analysis of the competitive-strengths matrix,
one would deduce that a combination of strong financial position
and competent management are a mix that indicates a strong likeli-
hood of aggressive action on the part of the competitor. By using this
analysis on information obtained from various sources, it is quite
possible to keep tabs on what the competition is up to as well as pro-
vide a wealth of performance indicators and measures that could be
useful for performance management.
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