Case Study: The Competitive Profile Matrix

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The Competitive Profile Matrix (CPM)
The Competitive Profile Matrix (CPM) identifies a firm's major competitors and its particular strengths and weaknesses in relation to a sample firm's strategic position. Bharti Airtel Vodafone Reliance
Critical Success Factors Weight Rating Weighted Score Rating Weighted Score Rating Weighted Score
Market Share 0.15 4 0.60 3 0.45 2 0.30
Customer service 0.12 3 0.36 4 0.48 2 0.24
Financial position 0.10 3 0.30 4 0.40 3 0.30
Profit Margin 0.11 3 0.33 4 0.44 3 0.33
Consumer loyalty 0.10 3 0.30 3 0.30 2 0.20
Value added services 0.06 3 0.18 3 0.18 2 0.12
Price Competition 0.10 3 0.30 3 0.30 3 0.30
Technology
0.06 3 0.18 3 0.18 3 0.18
Growth 0.10 4 0.40 3 0.30 3 0.30
Brand Name 0.10 4 0.40 4 0.40 3 0.30
TOTAL 1.00 3.35 3.43 2.57
Margin improvement was supported by rationalization of dealer commissions and other marketing expense. Even the employee cost of few operators fell as well and network cost rose only marginally. [1] Source: Company reports, CRISIL Research
4. Cash flows
The cash flows of large operators are considerably better than mid-sized operators and operators with reduced presence. Source: Company reports, CRISIL Research
Bharti Airtel has a strong operating free cash flow. [1]
5. Debt levels [1]
The debt taken for 3G and 4G auctions in 2010 (which totaled up to a whopping Rs 1.1 tn) and their rollout plans (and the acquisition of Zain, in the case of Bharti Airtel) have adversely affected the leverage metrics of major operators. Also, the high amounts to acquire spectrum (for the auctions in February 2014 and March 2015, totaling more than Rs 1.7 trillion) is expected to keep operator returns subdued for a few years. Source: Company reports, CRISIL

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