Question

Aster Inc. is an American firm that manufactures and markets cell phones for sale in discount stores and other retail settings. The firm also sells cell phone accessories. Aster Inc. conducted an analysis of its competitive advantage for one of its product-markets and conducted research to learn the following information:

Competitive Position Factor	Competitive Position Rating	Relative Importance
Differentiation Advantage: Product quality Service quality Brand Image/Reputation	80 60 80	40% 30% 30%
Cost Advantage: Cost per unit Transaction costs Marketing productivity	40 60 60	70% 20% 10%
Marketing Advantage: Market share Brand awareness Channel advantage	40 40 20	40% 30% 30%

If differentiation advantage and cost advantage are both rated at 40% of total importance and marketing advantage is weighted much lower at 20%, what is Aster Inc.'s competitive position index for this product-market?

Answer 1

Competitive Position Factor	Competitive Position Rating	Relative Importance
Differentiation Advantage:		40%
Product quality	80	40%
Service quality	60	30%
Brand Image/Reputation	80	30%
Cost Advantage:		40%
Cost per unit	40	70%
Transaction costs	60	20%
Marketing productivity	60	10%
Marketing Advantage:		20%
Market share	40	40%
Brand awareness	40	30%
Channel advantage	20	30%

Let us find the scores for the three factors separately first

For differentiation advantage
Score = 80X40% + 60X30% + 80X30%	74

For cost advantage
Score = 40X70% + 60X20% + 60X10%	46

For marketing advantage
Score = 40X40% + 40X30% + 20X30%	34

Hence overall score = 40%X74 + 40%X46 + 20%X34 = 54.8

Hence Aster Inc's competitive position index for this product-market is 54.8