Question

A score of 1.88 means the company is losing the battle to be successful versus rival firms. Substantial strategy changes are likely needed especially in areas in the CPM where the firm scores a 1 or 2 versus rival firms' scores of 3 or 4. What does a score of 1.88 indicate about the company's success compared to rival firms?

1) The company is more successful than rival firms
2) The company is equally successful as rival firms
3) The company is less successful than rival firms
4) The company's success cannot be determined based on the given information

Answer 1

A score of 1.88 suggests that the company is underperforming compared to rival firms, indicating that it is less successful and may need substantial strategic changes. The correct answer is option 3).

Step-by-step explanation:

A score of 1.88 likely indicates that the company is less successful than rival firms, which is the third option. In competitive market analysis, particularly when using tools like the Competitive Profile Matrix (CPM) or the Herfindahl-Hirschman Index (HHI), numerical scores represent a firm's competitive strength relative to others in the industry. Lower scores suggest that a company is performing poorly in certain key areas compared to firms with higher scores. As the firm has received scores of 1 or 2 where rivals have scored 3 or 4, it would suggest that this firm is underperforming in comparison and may require substantial strategy changes to improve its competitive position.