Competitive Strength Assessment
What it is: By definition a competitive strength assessment is an assessment of the competition in a certain market to help managers account for the presence of competitors when making business decisions.
What you do:You pick key success factors for the industry and weigh them on a scale adding up to 1.00 on how important that factor is to the industry. You then rate the companies on a scale of 1-10 on how successful they are implementing these factors in their companies.
Why its helpful:This assessment is simple, quick, and useful for multiple reasons. First, if you complete the assessment honestly, it gives you a base on where you need to improve and where you excel within your company. It also helps you realize your competition and your strengths and weaknesses compared to them. After the assessment is complete, you can then start adjusting to what needs to be improved. For example, if one of your key success factors is “brand awareness” and your score in that area was a 2 out of 10, then you know you’ll have to start changing your marketing platform. This assessment can be done with any company that would be competition for you and it can be done as often as you would like based off whichever key success factors you see fit.
Lets run through an example involving the toy industry:
Company X:Has been established for 20+ years and has stores world wide. Has a large fan based and a catchy slogan that everyone is familiar with. Has an in-store and online store. Older company, so does not have social media except for a website. Has a clear message and target market.
Company Y:Has been around for 5 years. Only has stores on the east coast. Hits an older age group of children rather than all children. Has all social media including Instagram, snapchat, twitter, youtube, and a website. Does not have an online store to shop in. Struggles with getting their brand name out there and certain licensed brands refuse to put their toys on their shelves because lack of brand awareness
Key success factors within the toy industry: brand awareness and reputation, family-friendly image, innovation, licensing, growing customer base
As you can see, Company X has the higher score of 8.5 compared to Company Y with a score of 4.9. This should not surprise you based off the descriptions above about each company. This shows both companies what they do well on and where they can improve within their company.