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Competitive Profile Matrix (CPM)

The Competitive Profile Matrix (CPM) is a strategic management tool used to compare a firm to its major industry competitors by identifying each firm's strengths and weaknesses across critical success factors. The CPM rates competitors on factors given different weights, calculates weighted scores, and determines a total weighted score to analyze overall competitiveness. For example, a CPM showed Company 1 was the strongest overall with a score of 3.15 based on ratings across weighted critical success factors.

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2K views10 pages

Competitive Profile Matrix (CPM)

The Competitive Profile Matrix (CPM) is a strategic management tool used to compare a firm to its major industry competitors by identifying each firm's strengths and weaknesses across critical success factors. The CPM rates competitors on factors given different weights, calculates weighted scores, and determines a total weighted score to analyze overall competitiveness. For example, a CPM showed Company 1 was the strongest overall with a score of 3.15 based on ratings across weighted critical success factors.

Uploaded by

aravindbalachandran
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd

Competitive Profile Matrix (CPM)

Presented by
Aravind Balachandran
 Competitive Profile Matrix

 is an essential strategic management


tool used to compare one firm with the
other major players in the industry.

 identifies a firm’s major competitors and


its particular strengths and weaknesses.

2
Components of CPM
 Critical Success Factors

 are extracted after deep analysis of


external and internal environment of the
firm. 
 can vary from industry to industry.

3
Components of CPM contd…
 Ratings
 represent the response of firm toward the
critical success factors.
 higher the rating, better is the response of the
firm towards the critical success factor.
 ratings range from 1 to 4 and can be applied
to any factor.
 4 = major strength 3 = minor strength
2 = minor weakness 1 = major weakness

4
Components of CPM contd…
 Weight
 indicates the relative importance of a
factor to being successful in the firm’s
industry.
 0 carries the least importance while 1
carries the maximum.
 sum of all assigned weight to factors
must be equal to 1.

5
Components of CPM contd…
 Weighted Score
 is the result achieved after multiplying
each factor rating with the weight.

 Total Weighted Score


 the sum of all weighted score is equal to
the total weighted score.
 final value of total weighted score should
be between range 1.0 (low) to 4.0(high).

6
Competitive Profile Matrix

7
Key findings

 Overall, Company 1 is strongest, as


indicated by the total weighted score of
3.15, followed by Company 3.

 CPM shows how strong or weak a company


is compared to its competitors on the basis
of common factors.

8
References
 http://www.mba-tutorials.com

 http://www.soopertutorials.com

 Strategic Management – Concepts


and Cases (11th edition)
 Fred David

9
Thank you!

Questions?

10

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