Academic journal article Journal of Business Strategies

Expanding the Competitive Profile Matrix: Introducing the Production/operations Management, Marketing, Human Resource Management, Finance/accounting, Research and Development, and Information Systems Competitive Profile Matrices

Academic journal article Journal of Business Strategies

Expanding the Competitive Profile Matrix: Introducing the Production/operations Management, Marketing, Human Resource Management, Finance/accounting, Research and Development, and Information Systems Competitive Profile Matrices

Article excerpt

INTRODUCTION

Many strategic management professors teaching the capstone course of the Bachelor of Business Administration degree use the matrix approach, presented in Fred David's Strategic Management, 16th edition (2016). David uses a basic horizontal approach to strategic analysis and presents three stages of analytical matrices for strategic decision-making. The input stage, which includes the Internal Factor Evaluation Matrix, the External Factor Evaluation Matrix, and the Competitive Profile Matrix (CPM). The matching stage, which includes the Strengths, Weaknesses, Opportunities, and Threats Matrix, the SPACE matrix, the Boston Consulting Group matrix, the Internal-External (I-E) matrix, and the Grand Strategy matrix;. Finally the decision stage, which only includes the Quantitative Strategic Planning (QSPM) Matrix. The analytical flow of the matrices is horizontal, and takes the output from the input stage, and uses the matching stage matrices to produce recommendations for consideration in the decision stage. The analytical flow is horizontal except for one, the CPM. Could the CPM be expanded to extend its analytical use? Could the CPM be made more useful by expanding it vertically? Additionally, many strategic management professors believe the process of strategic analysis is as important as the final recommendations. Assuming the process itself is valuable, then expansion of the CPM vertically in the strategic management analytical decision-making process to include the six functional business areas is beneficial because it is vital to not overlook something important.

Our recent work extended the traditional CPM horizontally by creating an Internal Competitive Profile Matrix and an External Competitive Profile Matrix, which were subsequently plotted on a nine cell Company Comparison Internal-External Matrix (Capps & Cassidy, 2016). During the exercise, we considered this question: Are there benefits to using vertical analysis when considering a CPM? We believe the answer is "yes" when the corporate CPM is supported by functional area matrices with the top ten concepts in the six functional business areas (Capps & Cassidy, 2016). Moreover, because strategists believe the depth and thoroughness of the strategic management decision-making analytical process is a fundamental reason for conducting strategic audits, the authors introduce the following six new matrices Production/Operations Management CPM (POM-CPM), Marketing CPM (M-CPM), Finance/Accounting CPM (F-CPM), Human Resource Management CPM (HRM-CPM), Research and Development (R&D-CPM), and Information Systems CPM (IS-CPM) to provide more in-depth strategic analytical insight when analyzing competing companies.

THE NEW FUNTIONAL LEVEL CPM MATRICES

Since there is always a need to advance analytical tools used in the strategic management decision-making process (Fleisher & Bensoussan, 2003, 2007; Chang & Huang, 2006; Bygrave & Zacharkis, 2010; Capps & Glissmeyer, 2012; Cassidy, Glissmeyer, & Capps, 2013), Capps and Glissmeyer (2012) advanced the strategic management decision-making process by creating the Internal Competitive Profile Matrix and an External Competitive Profile Matrix tools for added insight. Cassidy, Glissmeyer, and Capps (2013) visually mapped an I-E matrix using both traditional and extended concepts. This produced different plotting points, and sometimes the result was also a different I-E cell assignment. Based on this foundation we now shift our focus and address the issue of how a CPM can be expanded using vertical analysis by creating six new functional area matrices: the POM-CPM, M-CPM, HRM-CPM, F-CPM, R&D-CPM, and an IS-CPM. Using vertical analysis, we introduce six CPM extensions expanding the matrix into the six functional business areas for more depth of analysis of companies' major differences. Below are the six proposed CPM matrices for your consideration. Introduced first is the POM-CPM, which focuses on the top ten areas of Production/Operations Management (POM) needing analysis and comparison in POM. …

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