Strategic Management

Major Bhargava R D
Executive Director
XHire HR Consulting LLP
Bangalore
 Strategic Management
Module 2
COMPETITIVE ADVANTAGE (12 HOURS)
 External Environment
 PESTEL Analysis,
 SWOT Analysis,
 Porter’s Five Forces Model,
 The Competitive Profile Matrix (CPM),
 Globalization and Industry Structure – Resources,
Capabilities and Competencies
 Value Chain Analysis – Core Competencies, Generic
Building Blocks of Competitive Advantage
 Distinctive Competencies - Avoiding Failures and
Sustaining Competitive Advantage
 Classification of
External Environment
 A firm’s External Environment can be divided into
Three parts: Operational
Environment

– Operating Environment Industry

Environment
(Competitive Position) Global/Remote
Environment
– Industry Environment
(Competitive Forces)
– Global/Local Environment
(Remote)
 A firm’s strategic actions are influenced by the
changes taking place in all the three environments.
 Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part III
 Competitive Profile Matrix (CPM)
 Globalisation & Industry Structure
 Resources, Capabilities and
Competences
 The Competitive Profile Matrix
(CPM)
 Operating Environment
– Factors in the immediate Competitive Situation that
affect a firm's success in acquiring needed
resources or in profitability marketing its goods and
services
 Most Important factors are:
– The Firm’s Competitive Position
– Its Customer Profile
– Reputation among Suppliers and Creditors
– Ability to Attract Capable Employees
Competitive Profile Matrix
(CPM)
 Competitive Profile Matrix

– is an essential strategic management

tool used to compare one firm with
other major players in the industry.

– identifies a firm’s major competitors

and its particular strengths and
weaknesses.

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 Components of CPM
 Critical Success Factors
– are extracted after deep analysis of external
and internal environment of the firm.
– can vary from industry to industry.

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 Components of CPM contd…
 Ratings
– represent the response of firm towards the
critical success factors.
– higher the rating, better is the response of the
firm towards the critical success factor.
– ratings range from 1 to 4 and can be applied
to any factor.
– 4 = major strength 3 = minor strength
2 = minor weakness 1 = major weakness

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 Components of CPM contd…

 Weight
– indicates the relative importance of a factor
to being successful in the firm’s industry.
– 0 carries the least importance while 1 carries
the maximum.
– sum of all assigned weight to factors must
be equal to 1.

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 Components of CPM contd…
 Weighted Score
– is the result achieved after multiplying each
factor rating with the weight.

 Total Weighted Score

– the sum of all weighted score is equal to the
total weighted score.
– final value of total weighted score should be
between range 1.0 (low) to 4.0(high).

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Competitive Profile Matrix

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 Key findings

 Overall, Company 1 is strongest, as

indicated by the total weighted score of
3.15, followed by Company 3.

 CPM shows how strong or weak a

company is compared to its competitors
on the basis of common factors.

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 References
 http://www.mba-tutorials.com

 http://www.soopertutorials.com

 Strategic Management – Concepts and

Cases (11th edition)
– Fred David

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Competitive Position
Globalization and Industry Structure
Resources, Capabilities and Competencies
END OF PART III

?
 Next Session

 Value Chain Analysis

 Core Competencies
 End of Session
Thank You!

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 Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part IV
 Value Chain Analysis (VCA)
 Core Competencies
Value Chain Analysis
Core Competencies
END OF PART IV

?
 Next Session
 Generic Building Blocks of Competitive
Advantage
 Distinctive Competencies
 Avoiding Failures & Sustaining Competitive
Advantage
 End of Session
Thank You!

18-11-2018 26
 Strategic Management
Module 2
COMPETITIVE ADVANTAGE
Part V
 Generic Building Blocks of Competitive
Advantage
 Distinctive Competencies
 Avoiding Failures & Sustaining
Competitive Advantage
Generic Building Blocks of
Competitive Advantage
 Distinctive Competencies –
Avoiding Failures and Sustaining
Competitive Advantage

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END OF PART V

?
 End of Session
Thank You!

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