A Structured Approach To Developing Corporate Strategy
   Overview
   Demonstration   movie
   Tutorial
    • Getting Started
    • Economic Objectives
    • Segmentation Matrix
    • Ansoff Matrix
    • MAFs
    • Market Attractiveness
    • Define Competitors
    • CSFs •
    • Competitive Strength
    • Market History & F'cast
    • Life Cycle Analysis
    • Share Analysis
    • Boston Matrix
    • Directional Policy Matrix
    • Perceptual Maps
    • Gap Analysis
    • Risk Analysis
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Strategic Analysis and Planning with MATRIX V5
Tutorial Step 7 - Critical Success Factors (CSFs)

Start with the market! Base your Critical Success Factors (CSFs) around what your prospective customers value and what they need!

  • Are they looking for a long-term relationship with one supplier, or do they 'shop around' and make a decision about which supplier is offering the best deal on the day?
  • Do cultural issues influence prospective customers, or are local trading conditions likely to count against you?
  • Are your customers interested in product design and quality of service and prepared to pay a premium, or do they buy on price alone?

Once defined, CSFs such as 'Product Design', 'Service & Support Capability' etc are then entered into MATRIX V5 via the Competitive Strength scorecard. More Information.



The Competitive Strength and Criteria Scorecards are used to input Competitive Strength data into MATRIX V5, the software application for business strategists.

To display the 'Competitive Strength' scorecard exactly as shown below, select the Europe / Metallic Assemblies / Industrial Niche on the Segmentation Matrix, and click the ‘Competitive Strength (Data)’ button (right) which is located on the toolbar. Click the 'Competitive Strength (Data)' button.
The 'Competitive Strength' Scorecard in MATRIX V5.
Three Critical Success Factors have been defined for the Niche in focus. Clearly 'Product Design' and ‘Service & Support Capability’ (both weighted at 100) are the most important factors, whilst 'Price' (weighted at 20) is the least important factor.

The scorecard can accommodate an unlimited number of CSFs, though in practice a typical Niche will utilise perhaps 5 at most. Note, as different Niches will be driven by different needs and wants, CSFs may be different from Niche to Niche.

Now consider the relative importance of each of the different CSFs. For example it may be that 'Product Design' and 'Service & Support Capability' are much more important to customers market than 'Price'. Apply high 'Swing weights' to those CSFs that are most important, and lower swing weights to those CSFs that are less important.



Each CSF then requires further expansion into Criteria via the underlying 'Criteria' Scorecard.

To display the 'Criterion' scorecard exactly as shown below, having selected the 'Product Design' CSF, click the 'Criteria' button (right) which is located on the toolbar. Click the 'Criteria' button.
The 'Product Design' CSF has been broken down into four Criteria, namely 'MTBF Benchmarks', 'Precision Engineering', 'Quality of Materials ', and 'Documentation'. Note that each Criterion has been explicitly qualified with the 'scale' against which it is to be measured. For example 'MTBF Benchmarks' is a Value Function to be measured in months, whereas ‘Precision Engineering’ is a Direct Rating estimated on a ‘0 - 100 Scale’. Clearly 'MTBF Benchmarks' and ‘Precision Engineering’, both weighted at 100, are the most important Criteria. The strongest supplier against MTBF Benchmarks is EngineerIT Ltd who achieves a Value Function of 18 months. Budget Assemblies Ltd, which is the weakest supplier against this criterion, achieves a Value Function of 10 months. The host company (HandyMan PLC) achieves an intermediate Value Function of 15 months. 'Documentation' (weighted at just 30) is the least important criterion.

Note that Scores are applied to each Competitor within a Niche against a specific Criterion. MATRIX V5 supports both Direct Rating (e.g. 0 - 100), and Value Function (i.e. 'raw') scoring techniques. A Criterion may be defined as:

  • 'Conventional', where a higher score corresponds to a 'more competitive' proposition. An example is 'Efficacy' where the more efficacious a product, the more competitive is the supplier, or
  • 'Inverse', where a higher score corresponds to a 'less attractive' proposition. An example is 'Price', where the higher the Price, the less competitive is the supplier.

Remember, the Competitive Strength exercise represents the market's view of what it wants from an ideal supplier, and how each of the competitors acting within the market 'measures up' against the ideal!

The information provided via this data editor is used within Competitive Strengths & Weaknesses Analysis, the Directional Policy Matrix (Position on 'Relative Competitive Strength' Axis), Perceptual Maps, and Risk Analysis (Position on 'Risk' axis).

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