Positioning business in uncertain conditions by weighting a competitive profile matrix using the fuzzy DEMATEL

Article history: Received January 14, 2014 Accepted 10 June 2014 Available online June 14 2014 In competitive markets, various businesses compete with other competitors for preservation and development of their positions. This effort and competition can be demonstrated under various criteria (component), which represent the position of company in business environment. There are different tools to demonstrate accurate position of company or firm in a specific (target) market and mentioned tools have been developed in strategic management and marketing. One of these quantitative tools is Competitive Profile Matrix (CPM), which represents the position of company compared with other competitors. CPM is based on scoring various criteria (components) in target market of the company. The study proposes weighting in CPM matrix based on the implementation of Fuzzy DEMATEL technique. The proposed model considers uncertainty of weighting using fuzzy logic and the implementation of the proposed model is demonstrated using a simple example. © 2014 Growing Science Ltd. All rights reserved.


Introduction
In the current era, use of strategic management for directing business is common and natural.The directions generally require various qualitative and quantitative methods to optimize and to determine the goals and places.Hence, it can be said that strategic planning embraces different means and techniques.It is a powerful means of increasing efficiency and productivity of organizations (Huang, 2009).On the other hand, organizational competitiveness is achieved when the organization meets the variable needs of its clients better than its rivals do and on a constant basis.In the market environment where economic, social and technological factors are active, it is difficult to maintain competitiveness at all stages (Ramachandran & Voleti, 2004).In order to apply strategic planning in a competitive market to find a competitive place and save/enhance satisfactory attributes, strategies need to be formulated.This is a three-stage process, which results in a strategy formulated visual framework (David, 2011).In the formulation process, the Competitive Profile Matrix (CPM) is used to determine the place of firms in competitive markets.This matrix makes it possible to compare the company of concern with its rivals and to find its place in a highly competitive and turbulent market (Zimmerer et al., 2008).Weighting market evaluation criteria is of great importance in obtaining the values for the CPM matrix.Hence, different means and methods developed for structuring factors and determining key components can be used to weight the matrix in more targeted and productive way.The DEMATEL method was therefore used in this study.It is one of the best methods for determination of basic components.The DEMATEL method was designed for structuring factors and determining their influence and effect (Thakkar et al., 2006).Definite weighting is used in CPM calculations, but in uncertain conditions, this method does not yield realistic results.Hence, fuzzy weighting is preferred to definite weighting in such conditions.By creating the CPM matrix and using the fuzzy weights provided by the fuzzy DEMATEL method it is possible evaluate businesses in the uncertain conditions of the competitive market with more certainty.This model was employed in this research and a final model was proposed by applying the fuzzy DEMATEL method to the CPM matrix.

Competitive Profile Matrix (CPM)
The Competitive Profile Matrix (CPM) is a means of helping companies with comparing themselves with their superior rivals and evaluating themselves against major factors of success in their industry (Zimmerer et al., 2008).This matrix identifies the chief rivals of a company and their strengths and weaknesses in relation to the strategic place of the company.Although many researchers classify this this matrix into the group of external environmental evaluation tools, some others consider them to be double purpose tools (Moradi, 2011).This matrix along with tools such as the external factors evaluation matrix (EFE) and the internal factors evaluation matrix (IFE) focus on the formulation of a strategic plan in the "Input Stage" (the first stage).As seen in Fig. 1, this stage is the first of three main stages in the process of formulating an organizational strategy.In this stage, input data and information are entered and examined for initial processing purposes and preparing for making decisions in the next stages (David, 2011).

Fig. 1. The Strategy-Formulation Analytical Framework
Formation of a CPM matrix is completed in three steps.In the first stage, CSFs for the industry are extracted and weighted.Next, the chief rivals are identified and scored for every factor.The last step involves application of factors coefficients to the scores of companies and obtaining the total score (rating) of the matrix.Multiplication and summation of both the CPM and EFE matrices yield the same results (Zimmerer et al., 2008).However, the basic success factors in CPM refer to internal and external issues and thus the ratings reflect strengths and weaknesses (David, 2011).

Fuzzy DEMATEL
The DEMATEL method is an expanded method for formation and analysis of a structural model based on casual relationships among important components (Wu & Lee, 2007).This method has several attributes, one of which is presenting an efficient process for identifying hierarchies and relationships among system factors (Thakkar et al, 2006).The problem with the DEMATEL method is the certainty of values and the assumed conditions.Therefore, the fuzzy DEMATEL method was introduced for making decisions in uncertain conditions.In this method, variables of the fuzzy language are used to simplify decision making in uncertain conditions (Quan et al., 2011).
The use of the fuzzy DEMATEL method has increased recently and it has been used to perform analyses in various fields.One of the usages of this method is in identifying the major factors and criteria.Table 1 shows some of the examples of application of the fuzzy DEMATEL method to the identification of major components.The fuzzy DEMATEL method is applied as follows: Step 1) We can turn the ambiguous judgments into triangular fuzzy numbers according to Table 2.This table shows fuzzy numbers in five class (Quan et al., 2011).

Table 2
Corresponding relationship between language and fuzzy number
Step 3) We acquire normalized direct-relation fuzzy matrix by normalizing initial direct-relation fuzzy matrix, which is shown as Step 4) Now, the total-relation fuzzy matrix is computed.This matrix is defined as Therefore, matrix could be represented as follows, where ̃ , , , , , is the overall influence rating of decision maker for each criterion against criterion .
Step 4) The sum of rows and sum of columns of the sub-matrices , , denoted by the fuzzy numbers and , respectively, can be obtained through Step 5) To finalize the procedure, and are defuzzified through suitable defuzzification method.Then, there would be two sets of numbers: which shows how important the strategic objectives are, and which shows which strategic objective is cause and which one is effect (Baykasoğlu et al., 2013).

Conceptual Model
The model used in this research was a combination of the Competitive Profile Matrix (CPM) and the fuzzy DEMATEL method.Using the aforementioned method, the required weights are obtained from the CPM and then the weights are applied as coefficients of all options (rival companies) to obtain the numerical rating results.It is worth mentioning that using the output of the fuzzy DEMATEL method, major enhancement attributes are determined and the path to the enhancement of the performance of the company in the competitive market is shown.Fig. 2 shows the model proposed in this research.
The importance of the criteria is calculated with the following equation: . The importance of any criterion can be normalized as follows:

Numeric
A sample C

Table 1
Application of Fuzzy DEMATEL in Critical Success Factors analysis

Table 3
An example