Strategic Management

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CPM, or the CPM Matrix, stands for Competitive Profile Matrix and is a powerful strategic analysis tool. CPM allows business owners, stockholders and other interested parties to see the strengths and weaknesses of all major competitors in an industry on a single page. This helps visualize and communicate the competitive landscape. Ads by Google

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In most industries, competitors tend to have distinct strengths and weaknesses. While one particular player might have the lowest manufacturing costs, another could have the most recognized brand name. Yet another competitor could have the tastiest or most durable product, for example. CPM not only helps you place all of these on a single page, but also distil a vast amount of data into a single numeric score. As a result, you can rank companies in terms of the "total package" they bring to the table. This allows a manager or business owner to identify the strongest competitors as well as the areas where she most needs to improve. Attributes and Weights

Before you can produce the CPM, you need to identify the attributes that matter in the industry. If you run a supermarket, for example, the four key attributes might be: location, product selection, price and customer service. Next, you need to assign a weight to each attribute. The weights must be between 0 and 1 and the sum of the weights for all attributes must add up to 1. Naturally, the more critical an attribute, the higher its weight must be. In case of supermarkets, the weights might be 0.3, 0.3, 0.25 and 0.15 for location, product selection, price and customer service, respectively. Rating and Score

Next, each company must be assigned a score. You are free to select any scale for this exercise. However, five- or ten-point scales are common since they are easy to work with. When working with a five-point scale, the supermarket with the best location might be assigned a score of 5, for example, while the supermarket with the worst location might earn a 2. After finishing the scoring of each competitor for every attribute in the matrix, you must multiply the weight of each attribute with the score assigned to each competitor. This comprises the weighted scores. Composite Score and Visualisation

Adding the weighted score for each attribute of a particular competitor will give you the composite score of that company. The competitor with the highest composite score is the strongest player in the competitive landscape. If you are the strongest player, you must work hard to retain this competitive advantage. If you aren't, the CPM will help you visualize where you need to improve to catch up with the top player(s). To turn this data into a matrix, assign a column to each competitor and then list the attributes along the rows. The rating of each company for any given attribute is then placed at the intersection where the company name and attribute meet.

Describe the particular external environmental issues that impact upon financial services organisations’ strategic planning. Illustrate your description with examples from a financial services organisation with which you are familiar. Select 3 major challenges from the external issues that you have identified and analyse their potential implications for the organisation in your example. Describe the process for strategic management decision making and explore the tools or frameworks that can be used to analyse the organisation’s internal environment. Illustrate your answer with examples. SOLUTION

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