Decision making

What is the Competitor Analysis?

Let us discover another tool of competitor analysis, which is the “competitor matrix” or “competitive research” . To know who are your competitors and what their strengths and weaknesses, it is important to collect some key information available in the public domain about them (from company website, financial reports, newspapers, online database, search engines), the most relevant for your business and firm.

Step 1 : what is your industry ?

Firstly, you must identify the industry of the firm. Automobile, retail or real-state …. ?

Step 2 : what are your competitors in this industry ?

Secondly,  list your potential competitors in this same industry : competitor 1, 2, 3 … in each row of your matrix , don’t forget your firm at the first row !

In this step, you can capture your current competitors and may be your future competitors. You may identify some strategic groups which share the same strategy characteristics, goals or market niche…. The strategic groups identification will help you to prioritize which competitors to analyze since there are in the same strategic group that you target.

 Step 3 : Which information to capture about the competitors ?

In the third step:  determine the relevant metrics to analyze that allow you to determine each competitor position and strengths among the others.

Take some few questions to help you identify these metrics similar to :

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  • What are the performance metrics that define the industry ? May be related to revenue and profitability. For example, dividend policy, profitability, financial ratio, cash flow, capital investment
  • What are their key capabilities ? the product offered, services, innovation, brands, patents, marketing, company size, skill assets….
  • What are their objectives and goals ?
  • What is the mission and what are the values of these competitors ?
  • What is the strategy of these competitors ? How they positions their self in the industry and with which business model? What is the Strategy of growth ?

In case of digital marketing, different type of content can be analysed  : blog posts, whitepapers, eBooks, videos and images, newsletter, forums,…

Based on this matrix you can associate weight to each metrics and
a score to each competitor, thereafter, order them based on this scoring.

SWOT model

SWOT is the acronym of Strengths, Weaknesses, Opportunities and Threats. The SWOT analysis is the core of the strategy frameworks , since it is an efficient tool that helps the firm to identify their Strengths and Weakness through an internal analysis of the firm capabilities, thereafter, identify their opportunities and Threats by analyzing the external competitive environment of the firm.

How to conduct a SWOT analysis ?

  • Step 1 : Divide a paper into 4 sections
  • Step 2 : Title the first section “Strengths” then list all your capabilities. To determine your business’s strengths, you can guide your thinking with a few questions: what makes you different from the other competitors? What  do customers and employees appreciate about us? What gives us an advantage over others?
    • Financial positions, capital
    • Talents : skills, competencies, expertise
    • Patents, licenses, processes…
    • Reputation
    • Loyalty
  • Step 3 : Title the second section, “Weaknesses” then list the weaknesses of your business. In this section, think about negative things that are within your control, but may possibly place you in difficulty and disadvantage over your competitors. Ask a few questions that might help you to determine these weaknesses : what can be improved in our business, services or products? What can be avoided ? What our customers or employees request to be enhanced ?
    • Financial problem
    • Lack of processes, expertise, competencies…
    • Churn
    • Unprofitable customers
  • Step 4 : In the third section, give the name “ Opportunities”. List in this section what opportunities are available or coming up. It is important to record all positive events that are outside of your control, but might affect positively your business. Use a few questions to determine these opportunities : What are technological trends that could give you a benefit? Are there any laws, policies or economic regulation that may provide you an advantage? Are there any coming events that can power your business?
    • New technology
    • Innovation
    • Future trends
    • Political issues
    • New regulations that can open new business or change customer behaviors
  • Step 5 : In the last area, name it “Theats” and determine in this area any threats or blocking points of your business. Areas that are out of your control can be determined using a few questions : What are technological trends that could affect or trouble the business? Are there any laws, policies or economic regulation that could impact negatively the business ? Are there any market risks that can disrupt the business?        
    • New competitors
    • Lose of potential customers
    • Lose of suppliers
    • New laws that impact negatively your business

The SWOT analysis tool can be combined with other strategist tools similar to the 5 Porter’s forces, the competitors matrix or the PESTEL analysis to address the external environment factors, after that, it combined with the capability analysis, the strategic map tool or the VIRN model to detect internal capabilities.

What is Decision Making ?

Definition of decision-making

Decision making can be presented as a problem of choice among several alternatives and is defined in the literature as a process of constructing the alternatives.

decision-making-ways

When making a decision, a person draws on existing knowledge to find out what the current situation is and what is needed? Then creates new knowledge of what to do with resources, and what will be the future state (expected results)? Information is the raw material of this decision making process.

In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.

Theodore Roosevelt

Decision-making is one of the main activities of managers and is a huge part of any process of implementation. Human efficiency with regard to decisions has been depicted by researcher from several perspectives:

  • Psychological: investigating the individual decisions in the context of a set of needs, expectations preferences and values the individual has or seeks.
  • Cognitive: the decision-making process regarded as a continuous process integrated in the interaction with the environment.
  • Normative: the examination of individual decisions in relation with the logic of decision-making and rationality and the invariant choice it leads to.

Decision making and Time factor!

Time is a critical factor in the decision-making process. Even if we acquire tools that help to take a decision if these tools can not inform decision makers at the right time about the way to take an action a disaster can occur.

Time isn’t the main thing. It’ s the only thing.

 Milels Davis

decision making time factor

In current challenging context with Time pressure on the decision maker, insufficient or too much information, accuracy versus speed, and effectiveness versus efficiency, having a decision support system (DSS) that supports people who make decisions is crucial.


Which Decision is the most effective ?

Which decision is the most effective? In live like in professional word, we are continually making decisions to achieve our personal, organizational or business goals.

Some decisions are with a short-term impact while others process medium or long term impact. Indeed, a real challenge is to make effective decisions that are based on factual insights, with a clear goal, and the means to measure actions that contribute to achieving the objectives pursued.

In Finance, Government, Education, Healthcare and more others domains, effective decisions are expected from each organization level’s, vertically from simple employee to Chief Executive Officer(CEO) and cross-domain: Human resource, finance, IT, sales, and so on.

decision making

In order to assist organizations in this decision-making process, Decision Support System(DSS) was introduced since 1970 and thereafter, Business Intelligence systems have emerged in the early 90s as a solution offering appropriate data capabilities  to provide organizations with valuable information for their decision-making process at various levels.