Competitive Profile Matrix

(CPM) – with FREE Template

https://expertprogrammanagement.com/2017/01/competitive-profile-matrix-cpm/

The Competitive Profile Matrix (CPM) is a strategic analysis that

allows you to compare your company to your competitors, in
such a way as to reveal your relative strengths and
weaknesses.
In a similar fashion to a Competitive Analysis Template, a Competitive Profile
Matrix, once completed will give you the insight you need to:
 Inform your strategic decision making.

 Highlight the relative strengths and weaknesses of both your

competitors and your organization.

 Uncover potential opportunities in the marketplace.

 Help you articulate your value proposition, as well as highlighting the

value proposition of your competitors.

While a Competitive Analysis Template is a wordy document describing the

differences between you and your competitors, a Competitive Profile Matrix
scores you against your competitors, each area of competitive importance
(called critical success factors).

Obviously, different organizations will have different strengths and

weaknesses, for example, while one organization might have the best cost
base due to its superior supply chain, another might have the best quality
product, whilst yet another organization might have the best customer service.
The advantage of a Competitive Profile Matrix is that it allows you to rank you
and your competitors against each other in terms of the “total package” you
bring to the marketplace.

An example of a CPM is shown below:

 Competitive Performance Matrix:
Key Components
There are 4 key components to a CPM:
1. Critical Success Factors

2. Weight

3. Rating

4. Score & Total Score

Let’s examine each in turn.

1. Critical Success Factors

Often called Key Success Factors (KSF), these are the key attributes that
matter or determine success within your industry. Critical success factors will
vary from industry to industry and be made up of both internal and external
factors. The more critical success factors included within your CPM the more
reliable your competitive analysis will be.
 As mentioned above, critical success factors will vary from industry to
industry, but some very common ones include:

 Innovation

 Marketing

 Brand Reputation

 Product Quality

 Customer Service

 Price Competitiveness

 Technological Competence

 Cost base

 Product Range

 Geographic Reach

 Customer Loyalty

 Management Competency

To show how critical success factors differ by industry consider the example
of a neighborhood convenience store. For a convenience store, a very
important critical success factor would be Strength of Location, measured by
how high a footfall the store gets. The factor would obviously be irrelevant for
an online retailer, where a more important metric might be Share of Search
Results for key search terms related to key product lines.

2. Weighting
Each critical success factor needs to be assigned a weighting from 0.1 to 1.0,
with a lower weighting meaning that factor is not particularly important in
 determining the success of a business, and a higher rating meaning that
factor is critically important in determining the success of a business.

We give each critical success factor a weight because different factors affect
business success more than others. If we look at our convenience store
example again, you can see that Location is a much more important factor
than Price Competitiveness.
An important point to note is that the sum of all the individual weights in the
CPM must total 1.0.

3. Score
Now that we have our critical success factors defined and their importance it’s
time to assign a score to each one to show how well a company for each
factor.

You can select any scale you like for scoring, but it is often easiest to stick
with something simple like a score between 1 and 4, defined as follows:

 4 – major strength/industry leader

 3 – minor strength

 2 – minor weakness

 1 – major weakness/industry laggard

Scoring competitors is often subjective. Once you have finished scoring every
competitor for every critical success factor, you need to multiply the weight of
each attribute by the score given to each competitor in the CPM. The result of
this calculation will give you the weighted score for each competitor.
4. Total Score
The final step to completing your CPM is to add values of all critical success
factors for each competitor. Doing this will give you a total score for each
competitor.

The company with the highest total score is the company that is strongest in
the marketplace (relative to the other competitors). The bigger the score
differential between one company and another, the bigger the competitive
advantage.

Competitive Profile Matrix

Template
If all this sounds a little complex, don’t worry, there is a free CPM template
you can download here, where you just plug in the values and away you go.

 
 Competitive Profile Matrix
Advantages
 CPM allows you to analyze the relative strengths and weaknesses of
your competitors which enable you to create an effective competitive strategy.

 To create a CPM you must first identify the critical success factors.
Identifying these factors is a crucial component of developing an effective
strategy

 By putting all competitors in a simple one-page matrix it makes it easy

to compare the different companies visually.

 The total score enables you to easily see which company has the best
total offering in the marketplace.

Competitive Profile Matrix

Disadvantages
 The scores that are assigned to critical success factors are subjectively
assigned. This means they are likely to suffer some degree of inaccuracy.

 It can be difficult to measure determine the scores of competitors critical

success factors, simply because this may not be public knowledge.

 When using a CPM a weakness in one area can affect your total score,
however, it may be advantageous to deliberately have a low score in one area
because of the advantages that low score gives to another area.

Summary
A Competitive Profile Matrix (CPM) can be used to compare one company to
another across a range of factors critical to success and is another strategic
tool which can be useful in helping you define your strategy. The total score
for a given company shows how competitive that company is in the
marketplace relative to other companies.
You can download a copy of the CPM template here.