The Rivalry Matrix Part I

Author : Ami Fitri Utami, SE., MSM

While porter aimed the five forces which may affect company’s competitiveness among industrial player without any guidance on the usage timing and event, Rivalry Matrix offer the solution. In this vein, this matrix claimed there are two important dimensions in analyzing which alternative competitive models use is the most appropriate include numbers of decision and the predictability condition of environment. In this vein, Rivalry matrix helps company to choose which strategic tools are the best to be used in varied industrial or challenges condition.

The first dimension is the decision variables. As we know that the numbers of decision variables for a company are either few or many. It’s referring to the scope of the strategic problem such as a narrow scope if one or few decision variables are included: launch of new product, entry into a new market, a capacity extension. In order to compete with a competitor, company make a decision to reduce the price selling, launching a new product, radically improving an existing product, entry a new market or combination among of those alternatives. In this situation to be more complex, more decision variables needed and more difficult to model the competitive mover for players.

Reference:

Furrer, O., & Thomas, H. (2000). The rivalry matrix:: Understanding rivalry and competitive dynamics. European Management Journal, 18(6), 619-637