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
Rocket-Blast, LLC, a beverage maker, has seen its profit margins reduced which presents a real problem for the company going forward (Precord & Macdonald, nd). Management has decided that operating costs must be reduced in order to increase profit margins to
first quarter of FY2012, prolonged, shortages in supplies due to capacity issues or other factors affecting the manufacturing process alter the price of these products. When there is a shortage in supplies the company may not be able to source required components in adequate quantities in a timely manner (Cisco Systems, Inc. SWOT Analysis, 2013).The company may be obligated to purchase components at higher than normal prices in the current market because of purchase commitments. When this happens its gross margin is affected. Supply chain issues also lead to delay in order fulfillment, affecting the revenues and margins of the company (Cisco Systems Inc. SWOT Analysis, 2013)
When testing if a corporate strategy is leading the company to success, there are techniques that can be used to project data collected from the company. Long term attractiveness, competitive strength, and the nine cell industry attractiveness/business strength matrix are used to highlight strategic positions of each business in a diversified company. The industry attractiveness gages the prospects for long-term performance. Competitive strength measures how strong the units are positioned in a business in their industry. Lastly, the nine cell industry attractiveness/business strength matrix merges information on attractiveness and competitiveness to show where in the industry does a unit fit when it comes to long-term success. Walt Disney
Distributors are pressed to reduce their costs to balance the lower margins from lower prices.
As “5.1 Cut Costs & Reduce Prices” results in both increased profits and increased market
Background One. Tel was launched by Jodee Rich and Brad Keeling in 1995 (Cook, 2001). At first, it looked to get the advantages from deregulation of the telecommunication industry by reselling other network’s capacity and making money through stock market speculation. Rich and Keeling tried to increase the company’s shares rather than profit the company (Cook, 2001). Initially, One.
Rivalry among established firms is fierce. There are several factors that illustrate this: established market players (6.1). The product is highly standardized and the switching costs of the customers are low. Players are aggressive (6.2)
The benefits of these assumptions are that while maintaining the current growth rate of 13%; we can maintain our COGS. One of the major factors contributing to the firm’s poor profit margin is operating expenses.
Higher leverage is very likely to create value for a firm considering capital structure change by exerting financial discipline and more efficient corporate strategy changes.
Competitive advantage is the advantage for the competitors and gained by the offerings from the consumers that have the greater value either by the low prices of the products and by providing the benefits and services to the consumers that denotes the high price. It is a set of the innovative and different features of the company and the products and services sale to the consumers so that company can achieve the targets what they have decided and it is the betterment for the enterprise in the competitive market (Porter, 2011). There are three determinants which can be used in the competitive advantage that what the company produce for their consumers, their target market that what they have to achieved and the competition from the other entity
Industry profitability: subpar to above average; fuel and maintenance costs, a growing senior staff division, unionisation of employees and competitive price wars are margins concerns.
In fact, some of the biggest threats to the company’s growth are the government’s regulation that increases the risk to the underlying business. In addition, the risk of losing the exclusive contract for the iPhone would be a major loss for AT&T. Most of the consumers choose AT&T because of their exclusive contract for the iPhone. Hence, this loss of business will significantly influence the AT&T's profitability and revenue. Moreover, the antitrust authorities play an important role on approved the merger of AT&T.
Under the circumstance that the mobile phone industry entered the 3rd generation, Nokia faced competition from both macro level and industry level. For the macro level, the government encouraged competition among the operators and handset manufacturers by giving digital licenses to new entrants. As a result, the mobile phones became more sophisticated, for example, the cameras and the games in the mobile phone. For the industry level, which can be analyzed by the Porter’s Five Forces, (lecture )Nokia was facing threat of new entrants, competitive rivalry and the bargaining power of buyers is increasing as well. As the government encourage completion between the handset manufacturers, there are several new entrants from different countries enter this industry, such as Apple from USA, Samsung from Korea. These new entrants compete with Nokia in both smartphone segment and basic phone segment. Some of them even constructed “ecosystems”, which they could integrate the services and applications quickly, in order to produce the phone in just two days. For the bargaining power of buyers’ aspect, they do not need to rely on the only operating system Symbian. They can choose Windows mobile launched by Microsoft, Android launched by Google and Ios launched by Apple, in addition, basically all of them are better than Symbian (Amiya, 2010). The buyers could choose any
Return on assets (ROA) tells how much profit a company generates for each dollar in assets. It measures the asset intensity of a business.
Competitive Positioning is defined as how you will differentiate your products or services thereby creating a value for in the market. A good positioning is influenced by market profile, customer segments, competitive analysis and methods of delivering value. (Marketingmo, 2014)