COMPETITIVE PROFILE MATRIX

Presented by:

Fauni, Katrizia Cerize

Mentored by:

Prof. Carmen Hicap

What is a Competitive Profile Matrix (CPM)?

• identifies a firm’s major competitors and its particular strengths

and weaknesses in relation to a sample firm’s strategic position.

• The weights and total weighted scores in both a CPM and an EFE
have the same meaning. However, critical success factors in a CPM
include both internal and external issues; therefore, the ratings
refer to strengths and weaknesses, where 4 = major strength, 3 =
minor strength, 2= minor weakness, and 1 = major weakness.
 What does the Competitive Profile Matrix
(CPM) do?

•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.
Competitive Performance Matrix Key Components

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.

-Innovation - Management Competency

-Marketing -Customer Loyalty
-Brand Reputation - Geographic Research
-Product Quality
-Customer Service
-Price Competitiveness
-Technological Competence
-Cost base
-Product Range
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.
SCORE
•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.
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.
 In this example, the two most important factors to being successful in the industry are
“advertising” and “global expansion,” as indicated by weights of 0.20.
• having a weight column makes for a more robust analysis, because
it enables the analyst to assign higher and lower numbers to capture
perceived or actual levels of importance.

•Note in Table 3-13 that Company 1 is strongest on “product quality,”

as indicated by a rating of 4, whereas Company 2 is strongest on
“advertising.” Overall, Company 1 is strongest, as indicated by the
total weighted score of 3.15.
THANK YOU AND GODBLESS!