the competitive profile matrix (cpm) is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses. the analysis also reveals company’s relative strengths and weaknesses against its competitors, so a company would know, which areas it should improve and, which areas to protect. the more critical success factors are included the more robust and accurate the analysis is. the following list provides some of the general csf, but the list is not definite and you should include industry specific factors in your matrix: weighteach critical success factor should be assigned a weight ranging from 0.0 (low importance) to 1.0 (high importance). the sum of all the weights must equal 1.0. separate factors should not be given too much emphasis (assigning a weight of 0.3 or more) because the success in an industry is rarely determined by one or few factors. ratings, as well as weights, are assigned subjectively to each company, but the process can be done easier through benchmarking.
for example, if company a, company b and company c, have the market share of 25%, 27% & 28% accordingly, they would all receive the rating of 4 rather than receiving ratings 2, 3 & 4. score & total scorethe score is the result of weight multiplied by rating. in our example, the strongest performer in the market should be company b (2.94 points). in addition, following questions should be helpful identifying industry’s csf: the best way to identify what weights should be assigned to each factor is to compare the best and worst performing companies in the industry. you should compare the scores on each factor to identify where company’s relative strengths and weaknesses are. therefore, company a should protect these areas while trying to improve its weaknesses in ‘sales per employee’ and ‘market share’.the company should also improve its strategy to become more successful in the industry. the cpm analysis reveals that android is the strongest player in the industry with relative strengths in market share, distribution channels, customization features, openness and cloud integration. the companies should create their strategies according to their strengths and weakness and improve their ratings in the most significant industry’s areas.
in a similar fashion to a competitive analysis template, a competitive profile matrix, once completed will give you the insight you need to: 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). 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. critical success factors will vary from industry to industry and be made up of both internal and external factors. to show how critical success factors differ by industry consider the example of a neighborhood convenience store. for a convenience store, a very important critical success factor would be strength of location, measured by how high a footfall the store gets. 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.
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. 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 final step to completing your cpm is to add values of all critical success factors for each competitor. the company with the highest total score is the company that is strongest in the marketplace (relative to the other competitors). the bigger the score differential between one company and another, the bigger the competitive advantage. the total score for a given company shows how competitive that company is in the marketplace relative to other companies.you can download a copy of the cpm template here.
the competitive profile matrix (cpm) is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses. 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 a competitive profile matrix (cpm) describes the strategic analysis of comparing a business to its competitors in such a way that it reveals its relative, .
the competitive profile matrix (cpm) is a tool that compares the firm and its rivals and reveals their relative strengths and weaknesses. in order to better understand the external environment and the competition in a particular industry, firms often use cpm. cpm, or the cpm matrix, stands for competitive profile matrix and is a powerful strategic analysis tool. cpm allows business owners, stockholders and other to hold your own against tough competition, you need a clear idea of how your company compares to theirs. a competitive profile matrix, also known as the cpm or with the competitive profile matrix, you’re able to identify the critical success factors that are contributing to the gains of you and your, . how do you prepare a competitive matrix? what is meant by a competitive profile matrix cpm why is it important to a company how does it relate to a company’s strategy? how do you read a cpm? what is a good cpm score?
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