Competitive Advantage
You are a marketing consultant to a Coffee Shop. A way for the Coffee Shop to determine the advantages (or weaknesses) is to compare the shop to their competitors by doing a Competitive Profile Matrix (CPM). When you identify the coffee shops key success factors, you can weigh them according to the strength/weakness and compare the coffee shop to their competitors. You can set any weight you wish, but a simple one is:
1 - Major weakness
2 - Minor weakness
3 - Minor strength
4 - Major strength
Key success factors can be identified for the business. They can include things such as the quality, location, brand recognition, profitability, product, the staff, etc. In the matrix, you will list these factors and rate the strength of each one in the coffee business as well as its primary competitors. See the example below. Each coffee shop was ranked first, second or third in each of the factors that may or may not affect their competitive advantage.
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Factor
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Coffee Shop
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Competitor 1 (Enter Name)
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Competitor 2 (Enter Name)
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Score
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Comments
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Score
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Comments
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Score
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Comments
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Quality
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1
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2
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3
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Location
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2
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1
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3
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Brand Recognition
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3
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1
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2
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Profitability
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2
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3
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1
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Product
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1
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2
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3
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Staff
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1
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3
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2
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Total
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Now using competitors researched on the Internet or in your local area, create a CPM for the coffee shop.
Other factors you may wish to consider include:
Price
Selection
Service
Reliability
Expertise
Company Reputation
Social Responsibility
Appearance
Credit Policies
Advertising
You can examine the above data in several ways. While the total score for the coffee shop business maybe higher than his major competitors, The coffee shop may have a lower score in another area which means they are not as competitive in those areas. Some of these areas might allow their competitors to create advantages and their customers or potential customers may choose their competitor over the coffee shop business. For example, if their products are closely rated but their competitor has a higher score on staff friendliness, might their customers start frequenting their competitor's business? What would you recommend to increase the coffee shops score in this area?