ENVIRONMENT ANALYSIS

COMPETITIVE PROFILE MATRIX

COMPETITIVE PROFILE
MATRIX
CORPORATE

BUSINESS Company comparison

against 2 major
competitors, if
supported by
qualitative or
FUNCTIONAL quantitative data in
case facts.
 COMPETITIVE PROFILE
MATRIX
WEIGHTS AND TOTAL WEIGHTED SCORES IN BOTH A CPM AND
EFE HAVE THE SAME MEANING

Differentiating features of CPM from EFE:

01 02 03
Critical success factors are Critical success factors not Ratings and total weighted score
broader; and even focus on grouped into opportunities and for rival firms can be compared.
internal data threats
COMPETITIVE
PROFILE MATRIX
• Identifies a firm's major
competitors and their
particular strengths and
weaknesses in relation to the
firm's strategic position.
STEPS
1 List the critical success factors as identified in the analysis of industry environment.

2 Assign to each factor a weight that ranges from 0.0 (NOT IMPORTANT) to 1.0 (VERY IMPORTANT). Weight indicates the relative importance
of that factor to being successful in the industry. Regardless of whether a key factor is an internal strength or weakness, factors considered to
have the greatest effect on organizational performance should be assigned the highest weights. The sum of all weights assigned to the factors
must equal 1.0

3 Assign ratings to each key external factor to indicate how effectively the firm's current strategies respond to the factor. Use 1 - major weakness; 2
- minor weaknesses; 3 - minor strength, 4 - major strength.

4 Multiply each factor's weight by its rating to determine its weighted score.

5 Sum the weighted scores for each variable to determine the total weighted score for the organization.
 Weights are industry-based.

REMINDERS
Ratings are company-based.
CPM
 Determine areas for improvement.

CPM
CPM
CONSIDER CRITICAL SUCESS FACTORS WITH
CASE FACTS SUCH AS:
Manufacturing-related

Distribution-related

Marketing Related

Technology-related

Skills-related

Organizational Capability

Others
CRITICAL SUCCESS FACTORS
Key areas that determine a company's success in the industry.

These factors vary among industries or even strategic groups.

It should include both internal and external factors for analysis.

To get a more robust and accurate analysis, include more relevant factors.
MANUFACTURING-
RELATED
• Low-cost production efficiency
• Quality of manufacture
• High-utilization of fixed assets
• Low-cost plant locations
• High labor productivity
• Manufacturing Flexibility
DISTRIBUTION-
RELATED
• Strong network of distributors/dealers
• Ample sample on retailers shelves
• Company-owned retail outlets
• Low distribution costs
• Fast delivery
TECHNOLOGY-
RELATED
• Scientific research expertise
• Production process innovation capability
• Product innovation capability
SKILLS-RELATED

• Superior talent
• Quality control know-how
• Design expertise
• Ability to come up with clever, catchy ads
• Ability to get newly developed product into
market quickly.
ORGANIZATIONAL
CAPABILITY
• Superior information systems
• Ability to respond quickly to shifting markets
• More experienced and managerial know-how
OTHERS

• Favorable image/reputation with buyers

• Overall low cost, convenient locations
• Pleasant, courteous employees
• Access to financial capital
PREPARE PRO-FORMA TABLE WITH PRE-COMPUTED
WEIGHTS.
 Competitive profile matrix is an essential strategic management tool

WRAP-UP
to compare the firm with the major players of the industry. It shows

the clear picture of a firm's strong and weak points relative to their

rivals.
BENEFITS

• Makes comparison more accurate as it uses the same factors to compare the firms.

• The analysis displays the information on a matrix, allowing for easier visual

comparison.

• The results facilitate decision-making

• Companies can easily decide which areas they should strengthen, protect, or what

strategies to pursue.
THANK
YOU