A New Competitive Analysis Tool: The Relative Profitability and Growth Matrix

Strategy & Leadership, Vol. 35, No. 2, pp. 30-38, 2007

Posted: 29 Mar 2007

See all articles by Joseph Calandro, Jr.

Joseph Calandro, Jr.

Fordham University - Gabelli Center for Global Security Analysis

Scott Lane

Quinnipiac University; Quinnipiac University

Abstract

Purpose: The purpose of this paper is to introduce the Relative Profitability and Growth matrix and to demonstrate its use as a competitive analysis tool.

Design/methodology/approach: Two well-known drivers of value are profitability and growth. After a study of 2x2 matrices we applied these drivers on a relative or industry comparative basis to a 2x2 matrix, and then we applied that matrix to competitive analyses of two industries to assess its strategic utility.

Findings: Our findings suggest that the Relative Profitability and Growth matrix could be a useful competitive analysis screening and communications tool.

Practical and research implications: The Relative Profitability and Growth matrix assesses a firm's profitability and growth relative to its industry and by so doing helps to identify and classify performance in a succinct format that facilitates further analysis. After such analysis has been completed the matrix can also serve as a convenient tool to communicate the analytical findings.

Originality/value: The Relative Profitability and Growth matrix is a value-driver based 2x2 matrix, the strategic utility of which is demonstrated and explained in two examples.

Keywords: Strategy, Competitive Analysis, Profitability, Growth

JEL Classification: L21, M20

Suggested Citation

Calandro, Jr., Joseph and Lane, Scott, A New Competitive Analysis Tool: The Relative Profitability and Growth Matrix. Strategy & Leadership, Vol. 35, No. 2, pp. 30-38, 2007. Available at SSRN: https://ssrn.com/abstract=974978

Joseph Calandro, Jr. (Contact Author)

Fordham University - Gabelli Center for Global Security Analysis ( email )

531 Hughes Hall
441 E. Fordham Rd
Bronx, NY 10458
United States

HOME PAGE: http://www.linkedin.com/in/josephcalandro/

Scott Lane

Quinnipiac University ( email )

Mount Carmel Ave
Hamden, CT
United States
(203) 582-8367 (Phone)

Quinnipiac University ( email )

United States
2035828367 (Phone)
2035828367 (Fax)

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