COMPETITIVE

PROFILE MATRIX
(CPM)
Benedicto, Janelle Katherine
Borromeo, Jolin Bianca
Bugayong, Hazel Kimberly
CPM identifies a firms major competitors
and its particular strengths and weaknesses
in relation to a sample firms strategic
position.
Competitive Profile Matrix
(CPM)
Comparison between EFE and
CPM
Includes only
external factors
Factors were
grouped into
opportunities and
threats
Includes both
internal and external
factors

The ratings and total
weighted scores for
rival firms can be
compared to the
sample firm
EFE CPM

Benefits of the CPM

The same factors are used to compare the
firms. This makes the comparison more
accurate.
The analysis displays the information on a
matrix, which makes it easy to compare the
companies visually.
The results of the matrix facilitate decision-
making. Companies can easily decide which
areas they should strengthen, protect or what
strategies they should pursue.


Parts of a CPM
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Critical Success Factors
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Market Share
Product Quality
Clear strategic direction
Customer service
Customer loyalty
Brand reputation
Customer satisfaction
Financial position
Cash reserves
Profit margin
Inventory turnover
Employee retention
Income per employee
Innovations per employee
Cost per employee
R&D spending
Strong patent portfolio
New patents per year
Revenue per new product
Location of facilities
Production capacity
Added product features
Price competitiveness
Low cost structure
Variety of products
Complementary products
Level of product integration
Successful product promotions
Superior marketing capabilities
Superior advertising capabilities
Superior IT capabilities
Size of advertising budget
Effectiveness of sales distribution
Employee satisfaction
Effective planning and budgeting
Variety of distribution channels
Power over distributors
Power over suppliers
Weights
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Ratings
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Scores
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Name of your major competitors
Company 1 Company 2 Company 3
Critical
Success
Factors
Weight Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product Quality 0.10 4 0.40 3 0.30 2 0.20
Price
Competitiveness
0.10 3 0.30 2 0.20 1 0.10
Management 0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer Loyaly 0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market Share 0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20

How to use the tool?

Step 1. Identify the critical success factors
Step 2. Assign the weights and ratings
Step 3. Compare the scores and take action
Step 4. Calculate weighted score for each
factor
Step 5. Find total weighted score for each
firm
Competitive Profile Matrix
(CPM)
CPM Sample
A word on interpretation:
-- Numbers reveal
the relative
strengths of firms,
but their implied
precision is an
illusion.
-- The aim is not to
arrive at a single
number, but rather
to assimilate and
evaluate
information in a
meaningful way
that aids in decision
making.
Company 1 Company 2 Company 3
Critical
Success
Factors
Weigh
t
Rating Score Rating Score Rating Score
Advertising 0.20 1 0.20 4 0.80 3 0.60
Product
Quality
0.10 4 0.40 3 0.30 2 0.20
Price
Competitive
ness
0.10 3 0.30 2 0.20 1 0.10
Manageme
nt
0.10 4 0.40 3 0.20 1 0.10
Financial
Position
0.15 4 0.60 2 0.30 3 0.45
Customer
Loyaly
0.10 4 0.40 3 0.30 2 0.20
Global
Expansion
0.20 4 0.80 1 0.20 2 0.40
Market
Share
0.05 1 0.05 4 0.20 3 0.15
Total 1.00 3.15 2.50 2.20
Special Note to Students
Gaining and sustaining competitive advantage is
the overriding purpose of developing EFEM and
CPM
Highlight various factors in light of where you are
leading the firm.
Make it clear how your firm, with your
suggestions, can subdue rival firms or at least
profitably compete with them
Remember to be prescriptive, rather than
descriptive.
Vagueness is the most common downfall of
students in case analyses.