Rating competitive position

Competitive-position rating turns an organisation’s key success factors into a structured comparison with rivals. It shows where advantage is strong, where a competitor is closing the gap and how the answer changes by segment or over time.

When to use it

• Use it after identifying customer purchasing criteria and deriving the key success factors for a defined market.
• Apply it when choosing segments, testing strategic priorities, assessing competitors or reviewing how a position may evolve.
• Refresh the evidence when customer needs, competitor capabilities or the structure of the market changes.

Origins

Weighted competitive-strength assessment developed from strategic planning, portfolio analysis and multi-criteria scoring rather than from one recognised inventor. Its practical form combines market-specific key success factors with relative ratings and explicit weights. The familiar calculation is (r1 ∗ w1) + (r2 ∗ w2) + (r3 ∗ w3) + … + (rn ∗ wn), where each rating is multiplied by the relevant factor weight and the weights total 100 per cent.

The arithmetic is simple; the quality of the result depends on choosing the right market boundary, factors, evidence and competitors. A transparent model makes judgement discussable rather than turning it into objective fact.

What it is

Oscar Wilde observed that a person cannot be too careful in choosing enemies. Organisations likewise need care in deciding where and against whom they compete.

The method asks how the organisation and each material competitor perform against the key success factors that determine customer choice and economic success. Those factors should come from Deriving key success factors, not from an internally convenient list of strengths.

The output is a weighted view of relative position for each important segment, current period and relevant future scenario. It can reveal the source of advantage, the competitor that poses the greatest threat and the few capabilities most likely to change the outcome.

Ratings may be informed initially by accumulated customer and supplier feedback, but important decisions deserve a more systematic evidence base: structured interviews, win–loss analysis, product tests, operational data and credible external research. Record confidence and disagreement as well as the point estimate.

How to use it

Begin with the customer purchasing criteria and KSF work completed in Tools 21 and 22. Define one coherent segment, select the material competitors and state the evidence date.

Use a 0–5 scale with behavioural anchors. A score of 3 means performance is broadly favourable and comparable with peers; 5 means very strong or dominant; 1 means weak; 2 means tenable but below stronger rivals; and 4 means strong. Rate every competitor against the same definition and evidence standard. The best performer may merit 5, but use 4 if the difference is meaningful without being dominant.

Avoid scoring in isolation. Ask people with different market perspectives to rate independently, discuss the evidence behind disagreements and revise only when the group can explain why. Where uncertainty is high, show a range.

Calculate the weighted score for each organisation. If there are n KSFs, the overall result is (r1 ∗ w1) + (r2 ∗ w2) + (r3 ∗ w3) + … + (rn ∗ wn). When the percentage weights add to 100 per cent, the result remains on the rating scale.

The following historical strategy assignment illustrates the method. The company led a UK engineering niche through market presence, service coverage and a strong cost base, while Competitor A was gaining customer interest through enhanced product features.