Analysis on the use of CPM in business strategy management
The purpose of this essay is to analysis whether Competitive Profile Matrix can create powerful visual catch-point tool and be the basis of the company’s strategy or not. In modern economic market environment, if an organization wants to stand firm in the fierce market competition, it should use strategic management (Brindza, Sprouse and Thompson, 2011). Therefore, there is always a need to expand and develop any tool adopted in strategic decision-making. Companies nowadays are trying to advance their traditional multi-matrix approaches in strategy analysis (David, 2009). The conventional matrices adopted in strategic planning and analysis can provide valuable insight towards a company’s future competition position.
A CPM can create the powerful visual and to convey information related to the organization’s potential competitive advantage (Raos and Sivaramakrishna, 2008). Generally, the critical success factors in a CPM include both the external and internal issues. The internal factors evaluation matrix will summarize organizations’ major internal weaknesses and strengths while the external factors evaluation matrix can essentially be a synopsis of the organizations’ external environment’s major threats and opportunities (Amason, 2011). They can help to impact the organization. In other words, internal factor and external factor evaluation matrices are able to allow the organizations to visualize their weaknesses, strengths, threats and opportunities while CPM utilize those critical success factors to compare itself to other competitors. In analyzing the past, present and future objectives of their competitors, organizations will be able to develop more strategic and comprehensive business plans that take advantage of their weakness and to promote their own strengths (Weerakkody and Reddick, 2013). However, different people hold different idea towards this point of view. Some professors regard CPM as the basis of a company’s strategy while some others were arguing that there are still many limitations. The following literature reviews will critically analysis the use of CPM in modern business management according to the past studies and researches.
This paper has attempted to conduct literature review and critical analysis of the using of CPM in business strategy management. Strategy management is something about to gain and maintain competitive advantages. It can also be defined as “anything that an organization does especially well when compared to its rival firms.” That is to say, when an organization can do something that its rival firms cannot do well, or the organization owns something its rival firm’s desire, it will represent as the organization’s competitive advantage. Poter (2008) mentioned that getting and keeping the competitive advantages is of great importance for long term success in the business development for an organization. The pursuit of competitive advantages can lead to the organizational success or failure. In other words, strategic management practitioners and researchers alike desire to better understand the nature and the role of competitive advantages in a variety of industries.
The use of CPM analysis does help organizations making effective strategies management for their business, but it still has some disadvantages people cannot ignore. However, if the organizations can take advantage of its strength and have clear idea of its shortcomings and try to avoid the passive effect of CPM, they can still get a lot of benefits from the analysis and make their business strategy management effective and appropriate. Normally, an organization can sustain the competitive advantages for only a certain period, because its rival firms can undermine and imitate the advantages (Jeschke, 2008). It is not adequate to simply obtain the competitive advantages. Therefore, an organization must strive to achieve the sustained competitive advantages. Firstly, it can continually adapt to the changes in both internal capabilities, resources and competencies and the external events and trends. Secondly, organizations can effectively formulate, implement and evaluate strategies which can capitalize upon those factors they analyzed. Thirdly, when an organization is doing CPM analysis for managing its business strategies, it is better if it combines the analysis with SWOT Matrix, Internal Factor Evaluation, External Factor Evaluation, Strategic Position and Action Evaluation and so on. Every strategy has to be made cautiously, because every step for organization’s moving forward is essential for business development. In a word, organization should be critical while conducting the CPM analysis for their business strategy promotion.