Mary Clair A.

Clarde Research Task

BSBM 2A MKTG 2265 (3-163)

I. Porter’s 5 Forces Model

Michael Porter, a professor at Harvard Business School, developed Porter's Five Forces

model. It has grown to be one of the most well-known and respected business strategy tools

since its release in 1979.

Porter's Five Forces model can be used to analyze an industry's attractiveness, assess

investment opportunities, and gauge the level of competition in the market. When using such

a tool, consider each force independently and how it corresponds to the specific industry to

which a firm belongs. Obtain information on each force and utilize it to make future strategic

decisions that are well-informed. Overall, Porter's Five Forces provides helpful information

about an existing market or a sector that an organization is considering venturing into, which

can aid in creating a plan of action.

The following are the five forces representing factors of "competitive pressure" in an industry:

1. Competitive Rivalry:

• the strength of competition in the industry.

2. Supplier Power

• the ability of suppliers to drive up the prices of your inputs and raw materials.

3. Buyer Power:

• the strength of your customers to drive down your prices.

4. Threat of Substitution:

• the extent to which different products and services can be used in place of your

own.

5. Threat of New Entry

• the ease with which new competitors can enter the market (and potentially drive

down your prices).

FORMAT DIAGRAM

Source: Porter's Five Forces EXPLAINED with EXAMPLES | B2U (business-to-you.com)

Example 1: Buying a Farm

Source: Porter's Five Forces - The Framework Explained - A Guide to Analyzing Competitiveness Using Michael Porter's Strategic Model (mindtools.com)
Example 2: Retail 2021

Source: Porter’s 5 Forces: Retail 2021 – Lisa Goller Marketing | B2B content for retail tech strategy

II. Boston Consulting Group (BCG) Matrix

The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio

matrix, is a business planning tool used to assess the "strategic position" of an

organization's brand portfolio. The BCG Matrix is one of the most prominent portfolio analytical

techniques. It categorizes a company's products and services into a two-by-two matrix. Each

quadrant is classified as low or high performance according to its relative market share and

growth rate.

The horizontal axis of the BCG Matrix illustrates the amount of market share of a product and

its strength in a particular market. Using relative market share helps measure a company's

competitiveness. On the other hand, the BCG Matrix's vertical axis represents a product's

growth rate and its potential to grow in a particular market.

There are four quadrants in the BCG Matrix:

1. Question marks:
• Products with high market growth but a low market share.

2. Stars:

• Products with high market growth and a high market share.

3. Dogs:

• Products with low market growth and a low market share.

4. Cash cows:

• Products with low market growth but a high market share

FORMAT DIAGRAM

Source: BCG Matrix - Overview, Four Quadrants and Diagram (corporatefinanceinstitute.com)

Example 1: A Brand’s Investment in Various Marketing Channels

Source: How to use the BCG Matrix | Smart Insights Digital Marketing
Example 2: Content Marketing Matrix (prospect purchase intent & decision style)

Source: Content Marketing Matrix - Moxee Marketing

III. Competitive Profile Matrix (CPM)

The Competitive Profile Matrix (CPM) is a tool used to assess the company's and its

competitors' relative strengths and weaknesses. Firms often use CPM to understand better the

external environment and the competition in a particular industry. The profile matrix identifies

a firm's key competitors and compares them using the industry's critical success factors. The

research also highlights the company's relative strengths and shortcomings versus its

competitors. As a result, a corporation can quickly identify the places it should enhance and

the regions it should defend.

 Competitive Profile Matrix

Source: Competitive Profile Matrix (CPM) - A Tool For Rivals Analysis (thinkinsights.net)

1. Critical Success Factors (CSF)

• The main aspects that affect an organization's success in its industry are known

as critical success factors (CSF). For a company to succeed in its field, it must

operate at the pinnacle of perfection. These variables differ between industries or

even amongst strategic groups. CSF should include both internal and external

factors for analysis. Therefore, adding more pertinent factors to an analysis is a

must for it to be more thorough and accurate.

2. Weight

• Assign a weight ranging from 0.0 (low importance) to 1.0 (high importance) to each

critical success factor. The weight indicates the importance of that factor in the

company's success. Not assigning weights will make all factors would be equally

important. It is an impossible scenario in the real world. The sum of all the weights

must equal 1.0. Separate factors should not be emphasized too much by assigning

a weight of 0.3 or more because just one or a few factors rarely determine a

company's success.

3. Rating

• The ratings in CPM refer to how well companies are doing in each area. They

range from 4 to 1:

i. 4 means a major strength

ii. 3 – minor strength

iii. 2 – minor weakness, and

iv. 1 – major weakness.

• It is necessary to assign each company subjective ratings and weights. However,

this process can be done more easily through benchmarking. Benchmarking

 reveals how thriving companies are doing compared to each other or the industry's

average. Note that firms can have equal ratings for the same factor.

4. Score

• The score is the result of weight multiplied by the rating, and each company

receives a score on each factor. The total score is simply the sum of all individual

scores for the company. The company receiving the highest total score is more

robust than its competitors.

Example 1: Company A, Company B & Company C

Source: Competitive Profile Matrix (CPM): Guide - SM Insight (strategicmanagementinsight.com)

Example 2: Smartphones Operating Systems
(Google’s Android OS, Apple’s IOS & Microsofts’s Windows Phone)

Source: Competitive Profile Matrix (CPM): Guide - SM Insight (strategicmanagementinsight.com)

IV. Strategic Position & Action Evaluation (SPACE) Matrix

“An approach to hammer out an appropriate strategic posture for a firm and its individual

business.” A SPACE Analysis aids the top-level management in making strategic choices and

decisions and creating a plan easier. SPACE stands for Strategy, Position, Action, and

Evaluation. An organization's external and internal environments are essential in the SPACE

Analysis.

Generally, the dimensions are represented in a matrix. The top of the Y-axis is Financial

Strength (FS), while the bottom is Environmental Stability (ES). The left of the X-axis presents

Competitive Advantage (CA), and Industry Attractiveness (IA) on the right. Combining these

leads to four positions (conservative, aggressive, defensive, and competitive), the SPACE

Analysis can be the key to beginning with innovative ideas and the appropriate corporate

strategy.

Source: SPACE Analysis explained, a great strategy tool - Toolshero

There are various factors evaluated to determine the dimensions and in summary:
Source: The Strategic Position and Action Evaluation Matrix (SPACE) - MBA Knowledge Base (mbaknol.com)
 V. Grand Strategy Matrix (GSM)

The grand strategy matrix is the instrument for creating alternative and various organizational

strategies. At the same time, companies and divisions can be positioned in one of GSM's four

strategy quadrants. The matrix is based on two dimensions: competitive position and market

growth. Data needed for positioning SBUs in the matrix is derived from the portfolio analysis.

This matrix offers feasible strategies for a company to consider, which are listed in sequential

order of attractiveness in each matrix quadrant.

Source: Grand Strategy Matrix - MBA Knowledge Base (mbaknol.com)

 REFERENCES

CFI Team. (2022, October 27). Boston consulting group (BCG) matrix. Corporate Finance Institute.

https://corporatefinanceinstitute.com/resources/management/boston-consulting-group-bcg-matrix/

Francis, A. (2018, February 16). The strategic position and action evaluation matrix (SPACE). MBA

Knowledge Base. https://www.mbaknol.com/strategic-management/the-strategic-position-and-

action-evaluation-matrix-space/

Francis, A. (2018, August 6). Grand strategy matrix. MBA Knowledge Base.

https://www.mbaknol.com/strategic-management/grand-strategy-matrix/

Goller, L. (2021). Porter’s 5 forces: Retail 2021. Lisa Goller Marketing.

https://www.lisagoller.com/2021/03/porters-5-forces-retail-2021/

Hanlon, A. (2022, August 19). How to use the BCG matrix | Smart insights digital marketing. Smart Insights.

https://www.smartinsights.com/marketing-planning/marketing-models/use-bcg-

matrix/#:~:text=The%20Boston%20Consulting%20group%27s%20product,as%20the%20Growth

%2FShare%20Matrix

Jurevicius, O. (2022, August 16). Competitive profile matrix (CPM). Strategic Management Insight.

https://strategicmanagementinsight.com/tools/competitive-profile-matrix-cpm/

Mind Tools Content Team. (2022). Porter's Five Forces - The Framework Explained: A Guide to Analyzing

Competitiveness Using Michael Porter's Strategic Model. Mind

Tools. https://www.mindtools.com/at7k8my/porter-s-five-forces

Moxee Marketing. (2020, May 30). Content marketing matrix.

https://www.moxeemarketing.com/content-marketing-matrix/

Mulder, P. (2022, September 26). SPACE analysis. Toolshero.

https://www.toolshero.com/strategy/space-analysis/

Sridharan, M. (2022, July 3). Competitive profile matrix (CPM) - A tool for rivals analysis. Think Insights.

https://thinkinsights.net/strategy/competitive-profile-

matrix/#:~:text=The%20Competitive%20Profile%20Matrix%20(CPM,industry%2C%20firms%20of

ten%20use%20CPM