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Competitive Profile Matrix
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Competitive Profile Matrix
F11011 – F11020
ContentsNeed for an external comparisonThe competitive profile matrixBuilding the matrixUnderstanding a CPM for a
companyConclusion
Need for External ComparisonUnderstand key opportunities and threatsDevelop appropriate strategies to
maximize opportunities and counter threats
Requires competitive intelligence in the following spheres◦Economic◦Social◦Political◦Legal◦Technological
External Information SourcesIndexes – Wall Street Index, Business
Periodicals IndexInternet Sources – New York Stock
Exchange, Investor Guide, BigBook.comMagazines – Barrons, Forbes,
Washington PostGovernment – Department of
Commerce, Science and TechnologyConsultants – Boston Consulting Group,
Deloitte
Tools for an External AuditPorter’s Five Forces
Model◦ Rivalry among
competitors◦ Potential entry of
new competitors◦ Potential
development of substitute products
◦ Bargaining power of suppliers
◦ Bargaining power of consumers
External Factor Evaluation (EFE) Matrix◦ Key factors◦ Importance of
factors◦ Ranking for factors◦ Sum of weighted
scoreCompetitive
Profile Matrix
The Competitive Profile Matrix Steps
Step 1
• Identify key factors
Step2
• Assign factors to each factor ranging from 0 to 1
Step 3
• Rate each factor from 1 to 4 for each firm. (1 – Greatest weakness 4 – Biggest Strength)
Step 4
• Calculate weighted score for each factor
Step 5
• Find total weighted score for each firm
CPM Matrix ExampleCollege Comparisons
Critical Success Factors Weight Rating Wt. Score Rating Wt. Score Rating Wt. Score Rating Wt. Score Rating Wt. ScoreFaculty 0.15 3 0.45 3 0.45 3 0.45 3 0.45 3 0.45Infrastructure 0.15 1 0.15 4 0.6 3 0.45 3 0.45 4 0.6Placements 0.15 2 0.3 4 0.6 4 0.6 2 0.3 3 0.45ROI 0.1 3 0.3 2 0.2 4 0.4 2 0.2 3 0.3College Brand 0.2 2 0.4 4 0.8 4 0.8 2 0.4 3 0.6Campus Life 0.05 1 0.05 4 0.2 3 0.15 3 0.15 3 0.15Location 0.1 4 0.4 4 0.4 4 0.4 2 0.2 3 0.3Student Diversity 0.1 2 0.2 3 0.3 3 0.3 3 0.3 2 0.2TOTAL 1 2.25 3.55 3.55 2.45 3.05
A B C D E
Facu
lty
Infra
stru
ctur
e
Plac
emen
tsROI
Colle
ge B
rand
Campu
s Life
Loca
tion
Stud
ent D
iver
sity
00.10.20.30.40.50.60.70.80.9
Comparison Of Key Factors Of Different Colleges
AdvantagesCritical success factors identifiedStrong and weak points of firm
with respect to competitors found out
Includes both internal and external factors as parameters
Comparative analysis made easier
LimitationsDifferences in overall scores of
two firms do not reveal by how much a firm is better than the other
Possible errors in factor weightage
Gives relative strength of firm, not an exact number
Not a substitute for intuitive judgement
ReferencesStrategic Management by Fred R. Davidhttp://mba-lectures.com/management/
strategic-management/974/competitive-profile-matrix-for-mcdonalds.html
www.shiksha.com
