An assignment of Competitive Profile Matrix

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1. An Assignment about how to develop & use a
Competitive Profile Matrix

SUBMITTED TO – XING YONGJIE

SUBMITTED BY – MD RAKIBUL ISLAM

ID – GJ2018071320014

COURSE TITLE – ENTERPERISE STRATEGIC

SUBMISSION DATE – 11
TH
NOVEMBER 2019

2. PAGE 1
What is Competitive Profile Matrix?

A competitive matrix is an analysis tool that helps you establish your
company's competitive advantage. It provides an easy-to-read portrait
of your competitive landscape and your position in the marketplace.

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
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.

The Competitive Profile Matrix Steps are:
 Identity key factors- 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.
 Assign factors to each factor ranging from 0 to 1.
 Rate each factor from 1 to 4 for each firm. (1- Greatest
weakness 4 – Biggest Strength)

3. PAGE 2
 Calculated Weighted: 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. An
important point to note is that the sum of all the individual weights
in the CPM must total 1.0.

 Complete the Score & take action: 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.
We 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.

Developing A Competitive Profile Matrix
 » 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.

4. PAGE 3
CPM Matrix Example

Showing the comparison of different key factors

5. PAGE 4
Advantages:
 Critical success factors identified
 Strong and weak points of firms with respect to competitors
found out
 Includes both internal and external factors as parameters
 Comparative analysis made easier.
Limitations:
 Differences in overall scores of two firms do not reveal by how
much a firm is better than the other
 Possible errors in factors weightage
 Gives relative strength of firm, not an exact number
 Not a substitute for intuitive judgement

Weaknesses of CPM
Although CPM depicts a firm’s present strengths and weaknesses in a
simplistic way, additionally, a number of limitations possibly lessen the
interest of using CPM as a strategic tool. One of the most powerful
reasons is that the factor’s scores are measured subjectively and non-
uniformity can happen when answering the same question because of
the subjective evaluations of the decision-makers without consistency
test

6. PAGE 5
Implication and Conclusion
The above discussion raises one fundamental question regarding the
uses of cpm as a strategic tool. Does CPM alone reveal or answer all the
basic issues relating to competitor analysis? Or is it enough to employ this
tool for strategy formulation? The selfish business world does not give a
second chance to the firm committing even a single mistake. Only careful
investigation of every single factor may ensure the success for the
company. Since, ‘strategies are potential actions that require top-
management decisions and larger amount of organizational resources
organizations should seek for sustainable competitive advantage to
remain competitive in the ever changing marketplace.