Competitive profile matrix: how to build one
Build a competitive profile matrix (CPM): pick critical success factors, weight them to 1.0, rate each firm 1 to 4, and compare the totals.
A competitive profile matrix (CPM) compares your firm with its main rivals on the same critical success factors. Weight each factor from 0.0 to 1.0 so the weights sum to 1.0, rate every firm from 1 to 4 (1 is a major weakness, 4 a major strength), multiply weight by rating, and add each firm's column.
Each firm's total weighted score runs from 1.0 to 4.0, and 2.50 is the average. The firm with the highest total is the strongest overall on the factors you chose.
The CPM uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
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What the CPM is for
The CPM belongs to the input stage of the strategy-formulation framework. It identifies your firm's major competitors and shows where each is stronger or weaker than the others, so the position you describe in your paper has a table behind it. It differs from the EFE matrix in three ways:
- It compares firms. The EFE scores one firm against its environment.
- Its factors are broader critical success factors, mixing internal and external issues, and they are not split into opportunities and threats.
- A rating measures strength or weakness, not how well the firm responds.
What you need before you start
You need your main competitors, the firms your customers actually compare you with, and the factors that decide who wins in the industry. Take the factors from your external and internal audits and from what customers choose on. Take each rating from evidence on that rival: its reports, prices, channels or reviews.
If you cannot find evidence for a rival on a factor, say so in the paper and state the assumption behind the rating. A blank is not a zero, and a column with gaps has no total to compare.
Step 1: Choose the critical success factors
Pick the factors that most decide success in the industry. Typical ones are product quality, price, distribution, brand loyalty, financial position and ordering channels. Choose factors that separate the firms; a factor on which every firm rates the same won't change the order, but keep it if it is critical in the industry.
The sample uses 6 factors. Keep each one distinct: two factors that describe the same thing count that thing twice.
Step 2: Assign one weight to each factor
Give each factor a weight from 0.0 (not important) to 1.0 (very important), based on how much it affects success in the industry. The weights must sum to 1.0. The weights are the same for every firm, so a CPM has one weight column.
Sum of all weights = 1.0Example: 0.25 + 0.15 + 0.20 + 0.15 + 0.15 + 0.10 = 1.00
Step 3: Rate every firm on every factor
Rate each firm from 1 to 4 on each factor, using whole numbers only:
- 1: a major weakness.
- 2: a minor weakness.
- 3: a minor strength.
- 4: a major strength.
There is no neutral rating, so you must decide whether each firm is on the strong or the weak side of each factor. Your own firm gets a rating too, on the same footing as the rivals.
“Where did you get the rating for this competitor?”
Point to the source for that cell: an annual report, a price list, a store count, a review set. If the evidence is thin, say it is thin and show why the rating is still the best reading.
Step 4: Multiply, add each column, and compare
For each firm, multiply every weight by that firm's rating, then add the column. Compare the totals.
Weighted score = weight × ratingTotal weighted score = sum of a firm's weighted scores
The total weighted score of a firm in a CPM ranges from 1.0 to 4.0, with 2.50 as the average, the same as in the EFE.
Worked example: Tala Provisions (fictional)
Tala Provisions, Inc. is a fictional coffee roaster, shown against two fictional rivals. The factors and ratings are made up for this guide.
| Critical success factor | Weight | Tala Provisions, Inc. | Harbor Bean Co. (fictional) | Northgate Coffee Corp. (fictional) | |||
|---|---|---|---|---|---|---|---|
| Rating (1–4) | Weighted score | Rating (1–4) | Weighted score | Rating (1–4) | Weighted score | ||
| CSF1 Product quality and freshness | 0.25 | 4 | 1.00 | 3 | 0.75 | 2 | 0.50 |
| CSF2 Price competitiveness | 0.15 | 2 | 0.30 | 3 | 0.45 | 4 | 0.60 |
| CSF3 Online and subscription ordering | 0.20 | 4 | 0.80 | 2 | 0.40 | 1 | 0.20 |
| CSF4 Customer loyalty | 0.15 | 3 | 0.45 | 3 | 0.45 | 2 | 0.30 |
| CSF5 Café and retail distribution | 0.15 | 2 | 0.30 | 4 | 0.60 | 3 | 0.45 |
| CSF6 Financial position | 0.10 | 2 | 0.20 | 3 | 0.30 | 4 | 0.40 |
| Total weighted score | 1.00 | 3.05 | 2.95 | 2.45 | |||
Take CSF1, product quality and freshness, weighted 0.25. Tala is rated 4, so its weighted score is 1.00. Harbor Bean is rated 3 (0.75) and Northgate 2 (0.50).
Weighted score = weight × rating0.25 × 4 = 1.00
Adding Tala's column gives its total.
1.00 + 0.30 + 0.80 + 0.45 + 0.30 + 0.20 = 3.05
The CPM uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
How to read the result
Tala's total is 3.05, against 2.95 for Harbor Bean and 2.45 for Northgate. Tala leads, but its lead over the nearest rival is only 0.10. Read the rows before you read the totals: Tala is the strongest on quality and online ordering and the weakest on price, distribution and financial position.
A CPM total compares these firms on these factors. It is not a market share, a profit forecast or a pass mark; a firm can lead the matrix and still lose on a factor your customers care about more than you weighted it. Change one weight and check whether the order of the firms holds.
Where sources disagree: some templates give each firm its own weights or use other rating scales. Strama follows David: one set of weights from 0.0 to 1.0 summing to 1.0, ratings from 1 to 4, and totals from 1.0 to 4.0.
Common mistakes
Using different weights for different firms.
The weights state what matters in the industry, which does not change from firm to firm. Separate weights make the totals incomparable.
Fix: keep one weight column, and let only the ratings differ between firms.
Rating response instead of strength.
The EFE rates how well the firm responds. The CPM rates how strong or weak each firm is on the factor, and a 4 is a major strength.
Fix: read the 1 to 4 labels in the step above next to each rating you give.
Counting one thing twice.
Factors such as “price” and “affordability” overlap, so they inflate the weight of the same issue.
Fix: merge overlapping factors into one and give it the combined weight.
Leaving a rating blank and comparing totals anyway.
A column with a missing rating has no valid total, and treating the blank as 0 drags that firm down unfairly.
Fix: finish every column, or drop the factor for all firms.
Comparing ratings and ignoring the weights.
A 4 on a factor with a small weight moves the total less than a 3 on a heavy one.
Fix: compare the weighted scores, row by row, before you say who leads.
What your panel will ask
What is a CPM, and how is it different from the EFE?
A CPM compares your firm with its rivals on critical success factors. The EFE scores your firm alone against its external environment. Name the factors you chose and the audit that produced them.
What is the range of the total weighted score in a CPM?
From 1.0 to 4.0, with 2.50 as the average. Then read your own result: 3.05 for Tala, 2.95 and 2.45 for the rivals, and what drives the gaps.
Why these critical success factors, and why these weights?
Show what in your industry analysis makes each factor decisive, such as what customers buy on. Be ready to move a weight and show whether the order of the firms changes.
Why did you choose these competitors?
Say what makes them the main rivals for the same customers, and cite where you found their figures. A rival you left out should have a reason in the paper too.
Where it goes next
The CPM sits beside the EFE matrix and the IFE matrix in the input stage. What it shows about your firm against rivals helps you word the strengths and weaknesses in your IFE and the competitive threats in your EFE, and those are the lists the TOWS matrix matches.
The CPM uses the same weight-times-rating arithmetic as the EFE. Try the sample EFE, no account needed.
Where this fits in your paper: the STRAMA paper format guide.
Sources
Method: Fred R. David's strategy-formulation framework, as set out in his Strategic Management: Concepts and Cases. Check the edition your program uses for page references.
Tala Provisions, Inc., its rivals and its sources are fictional, made up for this guide.
Try the sample EFE
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Related guides
- EFE matrix
Build an External Factor Evaluation (EFE) matrix: weights that sum to 1.0, ratings from 1 to 4, and what the total weighted score tells you.
- TOWS matrix
Build a TOWS matrix: pair strengths and weaknesses with opportunities and threats to write SO, WO, ST and WT strategies. Includes SWOT vs TOWS.