Management Consulting/mba assignment

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Question
1.      Successful strategy formulation does not guarantee successful strategy implementation. Therefore many management issues require management attention to ensure the effectiveness of strategy implementation. Identify and discuss any five [5] major issues that relate to strategy implementation phase.
2.      Explain the concept of Critical Success Factors [CSFs]. Take a firm of your choice, which is into consumer durables. Select any two products the firm manufactures and list out the critical success factors that are important for the success.
3.      Examine the need, uses, where, when and mode of application of the following statistical tools.
[a] Correlation analysis
[b] Factor analysis
[c] Multiple regression analysis
4.      Assume that you have been appointed to conduct a market survey for examining the satisfaction among the guests stayed in a star hotel, Design a sampling plan to accomplish this purpose.

Answer

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1.      Successful strategy formulation does not guarantee successful strategy implementation. Therefore many management issues require management attention to ensure the effectiveness of strategy implementation. Identify and discuss any five [5] major issues that relate to strategy implementation phase.

'Strategy is defined as the determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out those goals'

Strategy is a process and could be considered in fewer than three stages. These are: strategic analysis; this is the stage where through analysis the strategist identifies the opportunities threats, strengths and weaknesses in the environment; the strategic formulation stage, where a choice is made and the strategy implementation stage is the stage where the strategy is translated into action.
Implementing a strategy or strategy implementation is defined as 'the translation of strategy into organisational action through organisational structure and design, resource planning and the management of strategic change'.

Analysing the definition, it becomes obvious that strategy implementation is somewhat complex.  Therefore, the successful implementation of a strategy would be how well the various components in carrying it out are successfully integrated and interact.

To identify significant problems encountered in implementing a new strategy in a business, a critical look at the components to be applied in implementing the strategy would be a good pointer.  These are considered below:  1.Organisational structure and design; and strategy implementation; translating the strategy into organisational action by using the structure of the organization will also be dependant on the type of structure in use in the organization.  This is so because the needs of a multinational organization are different from those of a small business.  It is also possible that the extent of devolution or centralisation can influence strategy implementation.  For example using a matrix structure which often takes the forms of product and geographical divisions or functional and divisional structures operating in tandem; the time taken for decisions to be made may be much longer than in more conventional structures.  The organisational structure and design aspect of the strategy implementation deals with how the human resources in the organization are mobilised and organised to bring about the corporate strategy.  The main significant problems encountered through the usage of organisational aspect in strategy implementation is the fact that most of the employees can leave the firm if they feel that they are being Γ’018usedΓ’019 in actual fact if they are not motivated.  This is particularly so where the CEO or senior management imposes the strategy on the employees.

2.Another problem encountered here is the way and manner information is passed down or up the ranks.  If there is a blockage which impedes the flow of information processes it means that decisions would be made based on outdated or obsolete information.  This can be solved by devolving the central command for easy flow of information among all rank and files especially in implementing a new strategy in a business.  Recognition must be given to organisational structure and designs set up where operational and strategic decisions are made, there should be compromise if implementing a new strategy will succeed in any business.

3.The next aspect in strategy implementation- resource planning sets out resources and competences need to be created.  It deals with the identification of resources needed and how those resources will be deployed and controlled to create the competences needed to implement the strategies successfully.  This resource configuration is dependent on: protecting unique resources i.e. where a strategy depends on the uniqueness of a particular resource such as patent; and it must be protected; by legal means; fitting resources together, (mix resources to create competence) business process re-engineering (to create a dynamic improvement in performance) and exploiting experience by learning and improving continuously to improve competence.

4.One of the major problems of strategy implementation as a result of resource planning is a failure to translate statements of strategic purpose, such as gaining market share into critical factors that will make the purpose achievable and ultimately achieved.  This a critical success factor analysis can be pursue as a start in resource planning.  For example a definite timetable might be needed for an organization trying to introduce, say a new product for Christmas.
5. A detailed examination of the timing has to be done if production and its marketing would be a success; as well as the allocation of funds for this undertaking. The problem here is that due to the non-uniformity in the times needed for the various activities, it is difficult to know where to start.
the circularity of the problem is quite usual in developing a plan of action, and raises the question of where to start- with a market forecast, an available level of funds, a production-level constraint, or what?  The answer is that it may not matter too much where the starting point is, since the plan will have to be re-worked and re-adjusted several times.  A useful guideline is to enter the problem through what appears to be the major change area.  An organization planning new strategies of growth may well start with an assessment of market opportunity.  Someone starting a new business may will begin with a realistic assessment of how much capital they might have available.

6.Critical path analysis is recommended for strategies which have detailed planning of implementation.  Another problem envisaged is the conflict arising among departments on the allocation of funds especially where money is involved in the implementation of the new strategy.

7.The next component in the implementation stage of the strategy is the management of strategic change.  It is widely accepted that strategic change builds on four underlying premises:

1.       There is a clear view within an organization of the strategy to be followed.
2.       Change will not occur unless there is a commitment to change
3.       The approach to managing strategic change is likely to be context dependent.
4.       Change must address the powerful influence of the paradigm and cultural web on, the strategy being followed by the organization.

There are two types of change -incremental change-which merely builds on the skills, routines and beliefs of those in the organization, so that change is efficient and likely to win their commitment, and transformational change-which requires the organization to change its paradigm over time.  It could be a change in routine ('the way of doing things around here').  It could also be a change in strategy that will necessitate the change. Although the implementation of strategy concerns the changing aspect of organization structure, control systems and resource planning which does affect the day-to-day operations of members of the organization; people's behaviours and perceptions may not have changed.

To effect a successful strategy implementation, management must also adopt appropriate styles to manage the change processes.  For example, it there is a problem in managing change based on misinformation, or lack of information, education and communication style will be used.  This involves the explanation of the reasons for and means of strategic change.  Collaboration or participation involving those who will be affected by strategic change in the identification of strategic issues; intervention, direction and coercion styles.

Associated with management of strategic change is the problem of change management.  It becomes absolutely difficult to manage the change which comes about as a result of the implementation.  For example some managers will lose their position as a result of the change (delayering) others might be made redundant as a result of do upsizing others might still lose their job titles or position which they cherished most as a result of business process re-engineering.  This will demotivate the staff and the organization may lose some competent staff.  Others may have to be retrained to take up new positions or demoted if they are to remain in the organization.  This kind of problem can be avoided if management adopts a participatory style of leadership and get the staff involve from the formulation to the implementation stages of the strategy.

In conclusion, it could be expedient to point out that just as there are numerous definitions of strategy, its implementation style might differ and so might its attendant problems and solutions.  Nevertheless, since implementation involves the controlling of others behaviours and sometimes perceptions and culture, most problems would be human-related and probably possible solutions would be dependent on management style and behaviour of the leadership in terms of structure and availability and allocation of resources.

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2.      Explain the concept of Critical Success Factors [CSFs]. Take a firm of your choice, which is into consumer durables. Select any two products the firm manufactures and list out the critical success factors that are important for the success.

Critical success factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of a company or an organization
Critical success factors are elements that are vital for a strategy to be successful. A critical success factor drives the strategy forward, it makes or breaks the success of the strategy
CRITICAL   SUCCESS  FACTORS  COVERS

• Organizational factors (such as top management sponsorship).
• Environmental factors (such as business competition).
• Project-related factors (such as skills of project team and end-user involvement).
• Technical factors (such as quality of data sources)
• Educational factors (such as training courses).

core competency is a specific factor that a business sees as being central to the way it, or its employees, works. It fulfills two key criteria:
1.   It is not easy for competitors to imitate
2.   It can be leveraged widely to many products and markets.
A core competency can take various forms, including technical/subject matter know-how, a reliable process and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication.
Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. Core competencies are the collective learning in organizations, and involve how to coordinate diverse production skills and integrate multiple streams of technologies. It is communication, an involvement and a deep commitment to working across organizational boundaries. Few companies are likely to build world leadership in more than five or six fundamental competencies.
How are they important to the  business?
Identifying CSF's is important as it allows firms to focus their efforts on building their capabilities to meet the CSF's, or even allow firms to decide if they have the capability to build the requirements necessary to meet Critical Success Factors (CSF's).

in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so.
The following as an example of generic CSF's:
•   New product development,
•   Good distribution, and
•   Effective advertising
Factors that remain relevant today for many organizations.
Types of Critical Success Factor
There are four basic types of CSF's
They are:
1.   Industry CSF's resulting from specific industry characteristics;
2.   Strategy CSF's resulting from the chosen competitive strategy of the business;
3.   Environmental CSF's resulting from economic or technological changes; and
4.   Temporal CSF's resulting from internal organizational needs and changes.
Things that are measured get done more often than things that are not measured.
Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey).
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Five key sources of Critical Success Factors
MAIN ASPECTS OF Critical Success Factors and their use in analysis
CSF's are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSF's:
1.   The industry,
2.   Competitive strategy and industry position,
3.   Environmental factors,
4.   Temporal factors, and
5.   Managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.
The Industry
Critical success factor    Industry: There are some CSF's common to all companies operating within the same industry. Different industries will have unique, industry-specific CSF's
An industry's set of characteristics define its own CSF's Different industries will thus have different CSF's, for example research into the CSF's for the Call centre, manufacturing, retail, business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF's as market orientation, learning orientation, entrepreneurial management style and organizational flexibility.
In reality each organization has its own unique goals so while thee may be some industry standard - not all firms in one industry will have identical CSF's.
Some trade associations offer benchmarking across possible common CSF's.

Competitive strategy and industry position
Critical success factor    Competitive position or strategy: The nature of position in the marketplace or the adopted strategy to gain market share gives rise to CSF's Differing strategies and positions have different CSF's

Not all firms in an industry will have the same CSF's in a particular industry. A firm's current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSF's
The values of an organization, its target market etc will all impact the CSF's that are appropriate for it at a given point in time.
Environmental Factors
Critical success factor    Environmental changes: Economic, regulatory, political, and demographic changes create CSF's for an organization.
These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSF's Examples for these are the industry regulation, political development and economic performance of a country, and population trends.
An example of environmental factors affecting an organization could be a de-merger.
Temporal Factors
Critical success factor
Critical success factor
Critical success factor    Temporal factors: These relate to short-term situations, often crises. These CSF's may be important, but are usually short-lived.
Temporal factors are temporary or one-off CSF's resulting from a specific event necessitating their inclusion.
Theoretically these would include a firm which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group".
Practically, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organizations.
For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.
Managerial Position
Critical success factor
Critical success factor    Managerial role: An individual role may generate CSF's as performance in a specific manager's area of responsibility may be deemed critical to the success of an organization.
Managerial position. This is important if CSF's are considered from an individual's point of view.
For example, manufacturing managers who would typically have the following CSF's: product quality, inventory control and cash control.
In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.

How to write a good Critical Success Factor - CSF's

In an attempt to write good CSF's, a number of principles could help to guide writers. These principles are:
•   Ensure a good understanding of the environment, the industry and the company – It has been shown that CSF's have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customized for companies and individuals and the customization results from the uniqueness of the organization.
•   Build knowledge of competitors in the industry – While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organization's CSF's Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organization's strategy and also resulting CSF's
•   Develop CSF's which result in observable differences – A key impetus for the development of CSF's was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSF's which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSF's in observable terms would be helpful.
•   Develop CSF's that have a large impact on an organization's performance – By definition, CSF's are the "most critical" factors for organizations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSF's were developed, it is important to thus identify the actual CSF's, i.e. the ones which would have the largest impact on an organization's (or individual's) performance.
Finding information for writing Critical Success Factors (CSF's)

For the organization following the CSF method, the foundation for writing good CSF's is a good understanding of the environment, the industry and the organization In order to do so, this requires the use of information that is readily available in the public domain. Externally, industry information can be sourced from industry associations, news articles, trade associations, prospectuses of competitors, and equity/analyst reports to name some sources. These would all be helpful in building knowledge of the environment, the industry and competitors. Internally, there should be enough sources available to management from which to build on their knowledge of the organization. In most cases, these won't even have to be anything published as managers are expected to have a good understanding of their organization Together, the external and internal information already provides the basis from which discussion on CSF's could begin.

The information mentioned above can largely be accessed through the internet. Other sources which would be helpful, and not necessarily accessible through the internet, are interviews with buyers and suppliers, industry experts and independent observers.

CSF as an activity statement:

A “good” CSF begins with an action verb and clearly and concisely conveys what is important and should attended to. Verbs that characterize actions: attract, perform, expand, monitor, manage, deploy, etc. (“poor CSFs” start with: enhance, correct, up-grade, …)
Examples: “monitor customer needs and future trends”

CSF as a requirement:

After having developed a hierarchy of goals and their success factors, further analysis will lead to concrete requirements at the lowest level of detail

CSF as a key influence factor:
Some CSFs might influence other CSFs or factors such as markets, technologies, etc.
Such CSFs could be rephrased into “key influence factors” For example: “physical size” or “trained staff”

Key Performance Indicators (KPI's) and Critical Success factors
A critical success factor is not a key Performance Indicator (KPI). Critical success factors are elements that are vital for a strategy to be successful. KPI's are measures that quantify objectives and enable the measurement of strategic performance.

For example:
•   KPI = number of new customers/ response time
•   CSF = installation of a call centre for providing quotations
A Critical Success Factor Method
Start with a vision:
•   Mission statement
•   Develop 5-6 high level goals
•   Develop hierarchy of goals and their success factors
•   Lists of requirements, problems, and assumptions
•   Leads to concrete requirements at the lowest level of decomposition (a single, implementable idea) Along the way, identify the problems being solved and the assumptions being made Cross-reference usage scenarios and problems with requirements
•   Analysis matrices
•   Problems vs. Requirements matrix
•   Usage scenarios vs. Requirements matrix
•   Solid usage scenarios
•   Relationship to Usage Scenarios
•   Usage scenarios or "use cases"; provide a means of determining:
o   Are the requirements aligned and self-consistent?
o   Are the needs of the user being met as well as those of the enterprise?
o   Are the requirements complete
•   Results of the Analysis
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Using Critical Success Factors for Strategic and Business Planning
•    

Examples of Critical Success factors
Statistical research into CSF’s on organizations has shown there to be seven key areas. These CSF's are:
1.   Training and education
2.   Quality data and reporting
3.   Management commitment, customer satisfaction
4.   Staff Orientation
5.   Role of the quality department
6.   Communication to improve quality, and
7.   Continuous improvement
These were identified when Total Quality was at its peak, so as you can see have a bias towards quality matters. You may or may not feel that these are right or indeed critical for your organization.
The Critical Success Factors we have identified and us in the BIR process are captured in the mnemonic PRIMO-F
1.   People - availability, skills and attitude
2.   Resources - People, equipment, etc
3.   Innovation - ideas and development
4.   Marketing - supplier relation, customer satisfaction, etc
5.   Operations - continuous improvement, quality,
6.   Finance- cash flow, available investment etc

Following is a sample list of the more common success factors.
This list should serve only as a guide to get you started. Some of these factors will be irrelevant in a particular industry or competitive situation; others may need to be added, as appropriate.
The factors are grouped into three categories of organizational competency, you will use your own differentiators.
Examples of Success Factors:
Understanding of Market:
•   Sensitivity to changing market needs
•   Understanding of how and why customers buy
•   Innovative response to customer needs
•   Consumer loyalty
•   Linkage of technology to market demand
•   Link marketing to production
•   Investment in growth markets
•   Knowing when to shift resources from old to new products
•   Long-term view of market-development and resources
•   Ability to target and reach segments of market
•   Identify and exploit global market
•   Product-line coverage
•   Short time to market for new products
•   Lack of product-line overlap
•   Identification and positioning to fulfill customer needs
•   Unique positioning advantage
•   Strong brand image and awareness
•   Understanding of competitors' capabilities and decision rules
•   Sensitivity to cues for co-operation
•   Prevention of price wars
•   Aggressive commitment when required
•   Willingness to form inter company coalitions
•   Maximizing payback from marketing response to resources
Marketing Variables:
•   Distribution coverage, delivery speed, and prominence
•   Co-operative trade relations
•   Advertising budget and copy effectiveness
•   Promotion magnitude and impact
•   Sales force size and productivity
•   Customer service and feedback
•   High product quality
•   Patent protection
•   Low product cost
•   Ability to deliver high value to user
•   Large marketing resource budget
Decision making:
•   Marketing research quality
•   Information system power
•   Analytic support capability
•   Develop human resources
•   Attract the best personnel
•   Managerial ability and experience
•   Quick decision and action capability
•   Organizational effectiveness
•   Learning systematically from past strategies
Organizational Techniques
What is CPM (Competitive Profile Matrix)?
Competitive profile matrix is an essential strategic Management Tool to compare the firm with the major players of the industry. Competitive profile matrix shows the clear picture to the firm about their strong points and weak points relative to their competitors. The CPM score is measured on basis of critical success factors, each factor is measured in same scale mean the weight remain same for every firm only rating varies. The best thing about CPM that it includes your firm and also facilitates to add other competitors make easier the comparative analysis.
CPM is use full tool to communicate those attributes and show how the competition is addressing them. The matrix figure not only creates a powerful visual catch point, it conveys information regarding gaps in the current offerings, setting the stage to describe your competitive advantage and the basis for your company strategy.
Creating a competitive profile matrix requires an understanding of what the marketplace values, the key success factors, in other words, what makes the customer buy one company's product over another's' Think about a restaurant. People often choose to dine in restaurants based on a number of factors, including the location, the price and quality of the food, and atmosphere. Because you have strong understanding of your customer, you should be able to identify the key success factors of your market space. Once you have the key success factors, you list your competition and your venture in the matrix and then evaluate how each company fares in dealing with the key success factors.
Finding information about your competition can be easy if a company is public, harder if it is private, and very difficult if it is operating in 'stealth' mode (it hasn't yet announced itself to the world) [21].
Why CPM important for organization:
One thing we know about profitable growth is that companies that design and deliver more distinctive products can command a higher margin and are therefore more profitable. If your company is competing today only on cost then your future is at risk, this should be a Red Flag. Your products can easily be outsourced to lower cost producers either in the US or off-shore.
But by continually seeking out ways to make your products and services more unique and distinctive, as well as delivering measurable benefits to your customers, your company will on the road to developing a profitable growth plan now and in the future. The key is to take the first step on the road to profitable growth; the Competitive Profile Matrix is an excellent place to begin the journey.
Strategic Management in Organization:
It can be defined as art and science of formulating, implementing and evaluating cross functional decision that enable an organization to achieve its objectives. As this definition implies strategic management focus on integrating management, marketing finance/ accounting, production/operation, research and development and computer information systems to achieve organizational success. The term strategic management in this text used by synonymously with the term strategic planning.
The term strategic planning originated in 1950's and was very popular between mid -1960's, and mid- 1970's. During these years strategic planning was widely believed to be the answer for all problems. At that time much of corporate America was 'obsessed' with strategic planning, following that 'boom' however, strategic planning was cast aside during 1980s as various planning models did not yield higher returns. The 1990s, however, brought the revival of strategic planning, and the process is widely practiced today in the business world.
A strategic plan is, in essence, a company's game plan. Just as a football team needs a good game plan to have a chance for success, a company must have a good strategic plan to be able to compete successfully. Profit margins among firms in most industries have been so reduced that there is littlie room for error in the overall strategic plan. A strategic plan results from tough managerial choices among numerous good alternatives, and signals commitment to specific markets, policies, procedures, and operations in lieu of other, 'less desirable' courses of action.
Formulating CPM:
'The CPM identifies a firm's major competitors and their particular strengths and weaknesses in relation to a sample firm's strategic position?.
There is some important differences between the EFE and CPM, first, the critical success factors in a cpm are border. These factors are also not grouped into opportunities and threats as in the EFE. In a cpm, the ratings and weighted scores can be compared to rival firms.
One of the best tools you can use to define new opportunities for growth is the Competitive profile Matrix Analysis. Using it will help you find opportunities to innovate with new or improved products, services and marketing strategies.
A competitive matrix is used to critically profile and compare your company against your known competitors. It is an analytical tool that helps you establish your company's competitive advantage in an easy to use and read format. At one glance you should be able to see your company's competitive landscape, your position in a given market and possible opportunities to differentiate your company's products and Services from the competition.
CPM includes both internal and external factors to evaluate overall position of the firm with respective to Their Major competitors.
Management, Marketing, finance/accounting, production/operations, research and development, and management information systems represent the core operations of most business. A strategic 'management audit of a firm's internal operations is vital to organizational health. Many companies still prefer to be judged solely on their bottom- line performance. However, an increasing number of successful organizations are using the internal audit to gain competitive advantages over rival firms.
The IFE matrix, CPM, EFE matrix, and clear statements of vision and mission provide the basic information needed to formulate competitive strategies successfully. The process of performing an internal adjusts represents an opportunity for managers and employees. [22]
What is IFE? (Internal factor Evolution)
Internal factors are extracted after deep internal analysis of the company. Obviously every company have some weak point and strong point that's the reasons internal factors are divided into two categories namely strengths and weakness.
Strengths:
Strengths are the strong areas or attribute of the company, which are used to overcome weakness and capitalize to take advantage of the external opportunities available in the industry.
Weakness:
Weakness are painful for the company means these are the weak factors which needs to be improve in future otherwise if they exposed to the competitors they can take the advantage of it.
Examples of Internal Factors:
There are few examples of internal factors of the company.
Strengths:
•   Strong marketing and promotion
•   Best product quality
•   Strong Financial condition
•   High Market Share
•   High value assets
Weakness:
•   High cost operations
•   Manufacturing cost is high
•   High employee turnover rate
•   Expensive products
•   Loss in joint venture
What is EFE (External factor evolution?
External factors are extracted after deep analysis of external environment. Obviously there are some good and some bad for the company in the external environment. That's the reason external factors are divided into two categories opportunities and threats.
Opportunities:
Opportunities are the chances exist in the external environment, it depends firm whether the firm is willing to exploit the opportunities or may be they ignore the opportunities due to lack of resources.
Threats:
Threats are always evil for the firm, minimum no of threats in the external environment open many doors for the firm. Maximum number of threats for the firm reduces their power in the industry.
How to Build a Competitive Profile Matrix:
This matrix can be just a simple chart or table and typically starts with evaluation factors that are pertinent to your company's industry and that will help you begin to differentiate your products and services from your competitors. You can also include features and benefits in these factors. For features, answer simply Yes or No, and for benefits go deeper and assign a ranking versus your competitors of 1 - 5, with 1 being low and 5 being high. Ultimately, you will want to define those features that deliver significant benefits to your customers when compared to the competition.
There are five steps required in developing a CPM. , First, strategists need to identify key success factors in the industry by studying the particular industry and, through negotiation, reaching a consensus on the factors most critical to success. Of course, these key factors can vary over time and by industry. CPM should comprise five to fifteen keys success factors.
The second step is to assign a weight to each key success factor to indicate its relative importance regarding success in the industry. Appropriate weights can be determined by comparing successful competitors with unsuccessful competitors.
Third, strategies should assign a rating to each competitor to indicate their perception of the firm's strength or weakness in returns of each key success factor.
The forth step, the weight assigned to each key success factor is then multiplied by the corresponding rating for each competitor to determine a weighted score for each firm. The weighted score indicates the relative strength or weakness of each competitor on each key success factor. [23]
The final step developing the CPM is to sum the weighted score column for each competitor. This results in a total weighted score for each firm, which reveals the relative over all strength of the sample firm compared to each major competitor. The highest total weighted score indicates the stronger competitor, while the lowest total weighted score reveals perhaps the weakest first.
Here's an example of a Competitive Profile Matrix :
As the result show Harley Davidson is dominating on critical success factors because the total weighted score is high compare to Yamaha and Honda
Analysis of the example:
Identify all of the key features or benefits that are important to your existing and potential customers and then rank how your company compares with your competitors.
Analyze what it means to your company's Profitable Growth strategy.
Here are a few things the CPM may reveal: Improve your service function to help customers use your products more effectively Develop a customer training function that trains the people who will use your products how to use them in the safest and most effective way Develop new ways to easily customize your products to meet the differing needs of customers and will differentiate your products from the competition Develop a new marketing campaign linked to a revised sales plan to communicate your message of cost effective benefits more clearly to potential customers. If you find an opportunity to develop a new product that will further differentiate your company, form an internal team, set a time line and find available and affordable resources to help you get this done as quickly as possible Use this competitive matrix as an internal sales training tool to help your sales staff and outside reps communicate your company's competitive advantage more clearly to customers Use the matrix to find ways to improve your products or services when compared to your competitors.
Rating:
Rating in CPM represents the response of firm toward the critical success factors.
Highest the rating better the response of the firm towards the critical success factor.
Weight:
Weight attribute in CPM indicates the relative importance of factor to being successful in the firm's industry.
The weight range from 0.0 means not important and 1.0 means important, sum of all assigned weight to factors must be equal to 1.0 otherwise the calculation would not be consider correct.
Weighted Score:
Weighted score value is the result achieved after multiplying each factor rating with the weight.
Total Weighted Score:
The sum of all weighted score is equal to the total weighted score.
Final value of total weighted score should be between ranges 1.0 (low) to 4.0(high).
The average weighted score for CPM matrix is 2.5 any company total weighted score fall below 2.5 consider as weak.
The company total weighted score higher than 2.5 is consider as strong in position.
The other dimension of CPM is the firm with higher total weighted score considered as the winner among the competitors
What is critical success factors or Key success factors?
Critical success factors (CSFs) have been used significantly to present or identify a few key factors that organizations should focus on to be successful. As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization? [10].
Identifying CSFs is important as it allows firms to focus their efforts on building their capabilities to meet the CSFs, or even allow firms to decide if they have the capability to build the requirements necessary to meet critical success factors (CSFs).
Success factors were already being used as a term in management when Rockart and Bullen reintroduced the concept to provide greater understanding of the concept and, at the same time, give greater clarity of how CSFs can be identified.
MAIN ASPECTS OF CSFs:
CSFs are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSFs: the industry, competitive strategy and industry position, environmental factors, temporal factors, and managerial position (if considered from an individual's point of view).
Each of these factors is explained in greater detail below.
The Industrie
An industry's set of characteristics define its own CSFs. Different industries will thus have different CSFs, for example research into the CSFs for the business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSFs as market orientation, learning orientation, entrepreneurial management style and organizational flexibility .
An example of industry and company CSFs:
The example presented by Rockart and Bullen was meant to illustrate that companies would have different CSFs and would not be completely similar. It can be seen though that many aspects of the CSFs could end up being similar for organizations in an industry.
Competitive Strategy and Industry Position
Not all firms in an industry will have the same CSFs in a particular industry. A firm's current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSFs. For example, in 2005 Caterpillar defined a new strategy to aggressively grow revenues over the long term. As part of that new strategy, Caterpillar defined several CSFs specific to the firm which were [12].
Organizational culture: "creating a culture that engaged employees, while focusing on safety and diversity"
Quality control: "accelerating the pace of quality improvement for its products, while focusing on improving new product introduction and continuous product improvement processes"
Cost focus: "implementing processes to become the highest-quality, lowest cost producer of our high-volume products in each hemispheric currency zone"
Other firms in Caterpillar's industry may or may not have the same CSFs, and are unlikely to have the same complete set.
Environmental Factors:
These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSFs. Examples for these are the industry regulation, political development and economic performance of a country, and population trends. For example, Ladbrokes, a UK bookmaker, will be establishing an international business in Italy where it has just acquired a business license, a requirement for foreign sports betting firms prior to establishing a business in the country .
Temporal Factors:
Temporal factors are temporary or one-off CSFs resulting from a specific event necessitating their inclusion. Rockart and Bullen (1981) state that typically, a temporal CSF would not exist and they give as an example of a firm which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group". However, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organizations. For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.
For example, Bear Stearns has stated an aggressive expansion plan in Asia to grow existing and new business lines . As Bear Stearns grows its business over the next few years, a CSF in each year is to build its management teams for the business and the financial products that it seeks to expand.
Managerial Position:
A final primary source of CSF is managerial position. This is important if CSFs are considered from an individual's point of view. Rockart and Bullen (1981) give an example of manufacturing managers who would typically have the following CSFs: product quality, inventory control and cash control. As examples, possible firms whose managers would have the stated CSFs mentioned by the authors include Heidelberg Cement (large global cement firm) and Tata Steel (Indian firm which now owns Corus Group, a UK steel manufacturing firm) [19]. In organizations with departments focused on customer relationships, a CSF for managers in these departments is customer relationship management .
An example of CSFs for the five primary sources is shown from a work on enterprise security management (see figure 2) which utilized the CSFs method to develop and deploy an effective approach to their business .
How to write good CSFs:
In an attempt to write good CSFs, a number of principles could help guide writers.
These principles are:
Ensure a good understanding of the environment, the industry and the company ? It was shown that CSFs have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customized for companies and individuals and the customization results from the peculiarity of the organization. This peculiarity stems from an organization's strategy, current position, and resources and capabilities.
Build knowledge of competitors in the industry ? While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organization's CSFs. Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organization's strategy and also resulting CSFs.
Develop CSFs which result in observable differences ? A key impetus for the development of CSFs was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSFs which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSFs in observable terms would be helpful.
Develop CSFs that have a large impact on an organization's performance ' By definition, CSFs are the "most critical" factors for organizations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSFs were developed, it is important to thus identify the actual CSFs, i.e. the ones which would have the largest impact on an organization's (or individual's) performance.
How to find information for writing CSFs,:
As we know that key success factors or critical success factors plays vital role in CPM,
But based on which information we will consider the key success factors was discussed here .For the organization pursuing the CSF method, the foundation for writing good CSFs is a good understanding of the environment, the industry and the organization. In order to do so, this requires the use of information that is readily available in the public domain. Externally, industry information can be sourced from industry associations, news articles, and trade associations, prospectuses of competitors, and equity/analyst reports to name some sources. These would all be helpful in building knowledge of the environment, the industry and competitors. Internally, there should be enough sources available to management from which to build on their knowledge of the organization. In most cases, these won't even have to be anything published as managers are expected to have a good understanding of their organization. Together, the external and internal information already provides the basis from which discussion on CSFs could begin.
At the individual level, there is a slight difference. The use of the CSFs method at the individual level is discussed by Munro and Wheeler (1980) [20], and involves a number of interviews in which the manager's goals and the CSFs that form the basis of the goals are discussed. The interviewer and the manager discuss the relationships between the goals and the CSFs and agree on which ones to continue with.
While Rockart and Bullen define the structured interview as the key method for identifying CSFs at the individual level, there are other methods that have been used and have been found to be effective in identifying them. These other methods have been identified as action research, case studies, Delphi technique, group interviewing, literature review, multivariate analysis and scenario analysis [16],[17].
CSFs Limitations:
A key limitation of the CSFs method is the qualitative aspect to identifying them. As they are developed from the industry to the company and possibly to the individual level, there is a significant degree of variability that could result from the qualitative input required. Thus, there could be significant differences in what various people consider CSFs in industries and organizations to be, necessitating considerable effort and discussion in determining them.
Integration of People Technique (Conflict management) & Organization technique (CPM) :
By integrating some of these techniques we can accomplish enhanced results for any organization, means here in we can add some of the people techniques (conflict management) as a key success factor in CPM. So that based on market analysis or research taking the common key factors as a common attribute along with other key factors, for building the competitive profile matrix. And assigning the rate and weight to each key success factor will be depend upon the after deep analysis of internal factor evolution, and external factor evolution, these ratings should be accurate and truthfully, because based on these ratings and weight we will compare the different organizations, to find the who is the leading competitor, not only that based on that each organization will able to find where they are lacking , while integrating these techniques we must consider each level of the technique . it means in conflict management we have different levels like, organization, group, individual, before going to consider the key factor as conflict management the organization should manage all the levels of conflicts in timely , based on this the ratings and weight will be allocated to each factor. On the other hands, the resolution of the conflict timely is a big advantage of the organization and we will use this as success factor in CPM but if the organization don't consider this factor and don't resolve the conflict timely and efficiently then it may case of disadvantage for the organization itself and the other same functional organization may get the advantage of this weak point. We will give the example of the CMP with having key success factor (conflict management) with different rating and weight to bring the results and show how effect on the organization. With the help of the results we will show the organizational strength if they having good score and weakness if the organization don't bother about this key factor.
Implementation of Key success factor (Conflict Management)
Here we implement the conflict management as a Key success factor for assumed an organization (XYZ). And assigning the weight for this success factor based on how this factor is important of an organization success. So we will assume three different cases to calculate the total weighted score for the output after implementation of conflict management (people technique) as a Key success factor. On the other hands we will assign the rating for this factor according to how well this factor depends upon organization response.
In our first example of CPM for organization XYZ, we consider that the best case and organization giving the more importance for conflict management in their organization. Also in first example we consider that the organization response and timely resolve the conflict issue which is represented by Rating value (4-high and 1-low). Based on these values we will calculate the results and compare with other cases as well.
The organization will let to know about their area of strength and weakness after getting results and can improve to take advantages after improving the specific area.
In this best case, we are giving the weight of Conflict management (Key success factor)=0.20 and the maximum rating=4 and the weight score will be multiplication of weight and rating. So the weighted score will be equal to 0,80 in this case.
The affect of this highest weight and rating can see in total Weight score that is equal to 3.14. As we know that the total weight score above 2.5 means that the organization is in strong position. Here we know that the Conflict management is giving the strength to the organization that affect on Total weight score. This will give advantage to the organization when we will compare with competitors.
The following graph showing the values of the best case scenario and the representation of some critical success factors with their weight, rating and weight score. The graphical representation is showing the values of Critical success factor (conflict management) to understand easily.
Conclusion:
It has now become clear that how the integration of two techniques (people technique & organizational technique) effected to achieve the better competitive advantage for an organization, here we mainly considered the key success factors as a important attribute, but for choosing this key success factors we analyzed many things, after that we considered conflict management is one of the best key success factor for an organization,
CPM is an important part of a firm's development of its strategy. Competitor's strength and weakness is much more important for any organization for better formulation of strategy for achieving the organizational goal, CPM also allows a firm to assess its own firm versus competitors and plan for what competitors' actions may be as a reaction to actions the firm may take. Finally CPM gives a firm a better understanding not only of the competitors but also their overall sector and where the emerging opportunities available. By integration of people techniques and organizational technique we achieve better results for organizations growth. We also found that the consideration of conflict management as a key success factor in organizational technique provides the organization to think about this major factor to get advantages over the competitors. And on the other hands, if we don't consider this factor may case to effect the other key success factors those may case of low rating in overall CPM.
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