Presented below is a sample response to a question #B for the company American Entertainment, Inc. This is for guidance only. As stressed in class, each company and their situation is different and the answers to the final question will vary considerably.

B. What does this theory recommend for this company? Explain.

Level One: The company has a total score of 3.28 with its two competitors totaling 3.21 for Regional Company A and 2.70 for Local Company X. Both the company and Regional A are rated as strong overall competitors and Local X is rated as average. The company is the strongest of the three companies analyzed on a competitive basis, however, it is only slightly better overall than Regional A.

Level Two: CPM theory says that companies should compete on those factors that are rated higher than their competitors and not compete on factors where they are rated lower (Kulzick, 2000). The company rates higher than both competitors on "quality of installation," "reputation and referral by friends," and "reliability of product and installation" and should compete on those factors. The company rates lower than at least one of its competitors and should not compete on the other factors.