Paired Comparison Analysis In A Nutshell

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Understanding a paired comparison analysis

Paired comparison analyses can be used in a variety of scenarios. One business may use them to settle on the required skills or qualifications for a new position. Another may use the analysis to ask consumers to review a new product or service.

The method is very effective and inexpensive to run. By showing the relative importance of different options, a business can identify the most pressing problem to solve or highlight the most beneficial solution.

Conducting a paired comparison analysis

Conducting a paired comparison analysis is a relatively simple affair.

A team should first be assembled and then follow these steps:

  1. Identify the options to be evaluated and assign a letter to each. For example, a coffee roasting business looking to expand may identify options such as expansion into overseas markets, improving customer service, and improving the quality of the beans.
  2. Then, create a matrix with options occupying row and column headings. Cells in the matrix that compare options with themselves should be greyed out. Duplicate comparisons between options should also be greyed out.
  3. In the remaining cells, compare each row option with the corresponding column option. In each cell, the team must place the letter of the option they deem more important. Then, they must score the difference in importance using a scoring system. Many teams choose to use a 0 (no difference) to 3 (major difference) system. 
  4. Add up all the option values and convert each score into a percentage of the total. The coffee roasting business may determine that overseas markets (Option A) received the highest score, followed closely by improving bean quality (Option C). Improving customer service (Option B) was not seen as important, potentially because it was already more than satisfactory.
  5. Depending on the level of detail required, the business may choose to undertake further analyses by comparing the positive aspects of certain options against each other.

Limitations to the paired comparison analysis

While the paired comparison analysis removes the subjectivity from decision making, it does not incorporate statistical inferences. In other words, teams have no means of discovering whether the differences between option pairs are statistically significant. 

Inevitably, there will also be disagreement on which of the compared options is more important. Since there are only two choices, the paired comparison analysis leaves little room for interpretation in the degree of importance for team members. This has the potential to stifle collaboration and comprise the integrity of the results.

Key takeaways

  • A paired comparison analysis objectively ranks a range of options by comparing them against each other.
  • A paired comparison analysis is cheap, effective, and simple to administer. It can be used in any situation where a business needs to identify the best decision among a list of potential scenarios.
  • A paired comparison analysis does not allow teams to make any statistical inferences about their results. The binary measure of option importance has the potential to decrease collaboration and impact on results integrity.

Connected Analysis Frameworks

Cynefin Framework

The Cynefin Framework gives context to decision making and problem-solving by providing context and guiding an appropriate response. The five domains of the Cynefin Framework comprise obvious, complicated, complex, chaotic domains and disorder if a domain has not been determined at all.

SWOT Analysis

A SWOT Analysis is a framework used for evaluating the business’s Strengths, Weaknesses, Opportunities, and Threats. It can aid in identifying the problematic areas of your business so that you can maximize your opportunities. It will also alert you to the challenges your organization might face in the future.

Personal SWOT Analysis

The SWOT analysis is commonly used as a strategic planning tool in business. However, it is also well suited for personal use in addressing a specific goal or problem. A personal SWOT analysis helps individuals identify their strengths, weaknesses, opportunities, and threats.

Pareto Analysis

The Pareto Analysis is a statistical analysis used in business decision making that identifies a certain number of input factors that have the greatest impact on income. It is based on the similarly named Pareto Principle, which states that 80% of the effect of something can be attributed to just 20% of the drivers.

Failure Mode And Effects Analysis

A failure mode and effects analysis (FMEA) is a structured approach to identifying design failures in a product or process. Developed in the 1950s, the failure mode and effects analysis is one the earliest methodologies of its kind. It enables organizations to anticipate a range of potential failures during the design stage.

Blindspot Analysis

A Blindspot Analysis is a means of unearthing incorrect or outdated assumptions that can harm decision making in an organization. The term “blindspot analysis” was first coined by American economist Michael Porter. Porter argued that in business, outdated ideas or strategies had the potential to stifle modern ideas and prevent them from succeeding. Furthermore, decisions a business thought were made with care caused projects to fail because major factors had not been duly considered.

Comparable Company Analysis

A comparable company analysis is a process that enables the identification of similar organizations to be used as a comparison to understand the business and financial performance of the target company. To find comparables you can look at two key profiles: the business and financial profile. From the comparable company analysis it is possible to understand the competitive landscape of the target organization.

Cost-Benefit Analysis

A cost-benefit analysis is a process a business can use to analyze decisions according to the costs associated with making that decision. For a cost analysis to be effective it’s important to articulate the project in the simplest terms possible, identify the costs, determine the benefits of project implementation, assess the alternatives.

Agile Business Analysis

Agile Business Analysis (AgileBA) is certification in the form of guidance and training for business analysts seeking to work in agile environments. To support this shift, AgileBA also helps the business analyst relate Agile projects to a wider organizational mission or strategy. To ensure that analysts have the necessary skills and expertise, AgileBA certification was developed.

SOAR Analysis

A SOAR analysis is a technique that helps businesses at a strategic planning level to: Focus on what they are doing right. Determine which skills could be enhanced. Understand the desires and motivations of their stakeholders.

STEEPLE Analysis

The STEEPLE analysis is a variation of the STEEP analysis. Where the step analysis comprises socio-cultural, technological, economic, environmental/ecological, and political factors as the base of the analysis. The STEEPLE analysis adds other two factors such as Legal and Ethical.

Pestel Analysis

The PESTEL analysis is a framework that can help marketers assess whether macro-economic factors are affecting an organization. This is a critical step that helps organizations identify potential threats and weaknesses that can be used in other frameworks such as SWOT or to gain a broader and better understanding of the overall marketing environment.

DESTEP Analysis

A DESTEP analysis is a framework used by businesses to understand their external environment and the issues which may impact them. The DESTEP analysis is an extension of the popular PEST analysis created by Harvard Business School professor Francis J. Aguilar. The DESTEP analysis groups external factors into six categories: demographic, economic, socio-cultural, technological, ecological, and political.

Paired Comparison Analysis

A paired comparison analysis is used to rate or rank options where evaluation criteria are subjective by nature. The analysis is particularly useful when there is a lack of clear priorities or objective data to base decisions on. A paired comparison analysis evaluates a range of options by comparing them against each other.

Related Strategy Concepts: Go-To-Market StrategyMarketing StrategyBusiness ModelsTech Business ModelsJobs-To-Be DoneDesign ThinkingLean Startup CanvasValue ChainValue Proposition CanvasBalanced ScorecardBusiness Model CanvasSWOT AnalysisGrowth HackingBundlingUnbundlingBootstrappingVenture CapitalPorter’s Five ForcesPorter’s Generic StrategiesPorter’s Five ForcesPESTEL AnalysisSWOTPorter’s Diamond ModelAnsoffTechnology Adoption CurveTOWSSOARBalanced ScorecardOKRAgile MethodologyValue PropositionVTDF FrameworkBCG MatrixGE McKinsey MatrixKotter’s 8-Step Change Model

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