SV matrix: strategic competitive analysis tool based on the dominance level

Abstract

This article addresses current tools for assessing the level of dominance in industries (Concentration Index (CR), Lind Index (L), Hall-Tideman Index (HT), Herfindahl–Hirschman Index (HHI)), identifies the limitations of the existing toolkit, and proposes its modification based on the developed SV Matrix, which allows analyzing the competitive situation on different markets. Drawing on the RAEX ranking of 2020 for four industries (consulting, audit, outsourcing, information technology), the authors propose classical indices modification algorithms to conduct a comparative analysis of the dominant level on different markets. To conduct a strategic competitive analysis based on modified indices, the article proposes to use the SV Matrix, allowing to reflect the comparative dominant level for different markets, as well as market shares controlled by leading companies. The technique is tested on the sample of 90 Russian industries (according to 2020 official reports) and allows to identify the presence of dominant groups in 31 sectors, assess their size and inner differentiation that resulted in comparative analysis of industries. The SV Matrix expands the toolkit for strategic analysis, allowing to assess not only the competition level in the market and the presence of dominant players in the industry, but also the differentiation level for companies within the dominant group. Applying this matrix help analyze the characteristics of the market (both for the companies already in the market and those just planning to enter it) and draw conclusions regarding the strategic behavior of companies.

Individual insurance products: is there a real choice for Russians?

“…The table below presents the authors' calculations of HHI, Lind, HTSV and CRSV, corresponding quadrant of the SV matrix, as well as the scale of each market in 2018-2021 for reference. * in these segments, the Lind index does not automatically show the dominance (which is related to the specifics of the index calculation, for more details, see (Shchelokova and Vertogradov 2021)):…”

“…For all markets, we look at the possible institutional advantages of the leaders in order to further assess the level of competition (Blokhin et al 2019). The use of the SV matrix (Shchelokova and Vertogradov 2021) to determine availability of consumer choice requires methodological justification. In accordance with the methodology of the matrix, the number of companies in the dominant group is determined by the Lind index (Linda 1976).…”

“…More information about coefficient calculation can be found in (Shchelokova and Vertogradov 2021) or a specialized web portal www.svmatrix.online . Depending on the values of HTSV and CRSV, the corresponding market is attributed to one of the following four quadrants, see Figure 1.…”