4/10/2022

• CPM identifies a firm’s major competitors

and its strengths and weaknesses in relation
to a sample firm’s strategic position.
Competitive Profile • It’s a tool that compares the firm and its
rivals and reveals their relative strengths
and weaknesses, so a company would
Matrix know, which areas it should improve and
Competitive which areas to protect.
(CPM) Profile Matrix • In order to better understand the external
environment and the competition in a
(CPM) particular industry, firms often use CPM.
• The matrix identifies a firm’s key
competitors and compares them using
industry’s critical success factors (CSF) or
key success factors (KSF).

1 2

Step 1: Identify immediate competitors

Starbucks McDonalds Dunkin Donuts
Step 1: Identify
immediate competitors

• Figure out who are the immediate

competitors you are competing with on a
day-to-day base?
• You should be looking back into your
• Industry analysis
• Environmental analysis
• Pick three to five immediate competitors.
• Refer to your findings from Rivalry Among
Competing Firms under Industry Analysis.

3 4

• Before you can produce the CPM, you

need to identify KSFs: the attributes
that matter in the industry.
Step 2: • Key success factors (KSFs) / CSF: factors
Identify Key that determine the relative success of
market participants.
Success
• KSFs are the factors every
Factors (KSF) companies must focus on to be • CSF are the key areas, which must be
/ Critical successful in an industry. performed at the highest possible level
success • Therefore it applies to everyone. of excellence if organizations want
• Ex- If you run a fast-food store, succeed in the particular industry.
factors (CSF)
for example, some of the key • Include both internal and external factors
attributes might be: Product • The more critical success factors are
quality, Customer Loyalty, included the more robust and accurate
Location, Price, etc the analysis is

5 6

1
 4/10/2022

Step 2: (KSF) / (CSF)

Starbucks McDonalds Dunkin Donuts
Step 3: Attach Weight to each factor
Key Success Factors
• Weight attribute in CPM indicates the relative importance of factor to
Advertising being successful in the firm’s industry.
Product Quality
• If there were no weights assigned, all factors would be equally
important, which is not possible in the real world.
Product Variety • Weight is industry-specific
Cost efficiency • The weight ranges from 0.01 meaning low importance or no
importance to 1.0 meaning highest importance. (Or 1% to 100%)
Financial Position
• The percentage indicates how important the factor is in succeeding
Customer Loyalty in that industry
• The more critical an attribute, the higher its weight must be.
Global Expansion
• Separate factors should not be given too much emphasis. Not just
Customer Service one or two factors decide success within an industry
• Sum of all assigned weight to factors must be equal to 1.0 or 100%
otherwise the calculation would not be considered correct

7 8

Step 3: Attach Weight to each factor

Starbucks McDonalds Dunkin Donuts
Step 4: rating
Key Success Factors Weight • Rate each competitor including your own company on each key
success factor
Advertising 0.05
• Rating is company-specific in comparison to the competitors.
Product Quality 0.20 • Rating in CPM represents the response of each firm toward the
Product Variety 0.10
critical success factors in comparison to other main competitors
• If a company has a higher rating than its competitors, then it
Price Competitiveness 0.20
implies
Financial Position 0.05 • Either it has better resources and capabilities (internal factors) than
its competitors, or….
Customer Loyalty 0.10
• It is in a better position to take advantage of the potential
Global Expansion 0.10 opportunities and deal with the potential threats present in this
industry compared to the competitors.
Customer Service 0.20 • And vice-versa
Total 1.00 • If a company has the same rating as another company, then it
implies that there is no competitive advantage or disadvantage
between them.

9 10

Step 4: rating
Step 4: rating
Starbucks McDonalds Dunkin Donuts
• Similar to the EFE and IFE matrix, the assignment of weight and
Key Success Factors Weight Rating Rating Rating
rating is a subjective matter but should be justified through
primary and secondary research. Advertising 0.05 4.00 3.0 3.0

Product Quality 0.20 4.00 2.0 3.0

• Rating range from 1.0 to 4.0 and can be applied to any factor.
Product Variety 0.10 3.00 4.0 3.0
• 1= Major Weakness; The company’s ability to respond is the
poorest among its competitors Price Competitiveness 0.20 2.00 4.0 2.0

• 2= Minor Weakness; The company ‘s ability to respond is Financial Position 0.05 3.00 4.0 3.0
average
• 3= Minor Strength; The company’s ability to respond is above Customer Loyalty 0.10 2.00 3.0 4.0

average Global Expansion 0.10 3.00 4.0 4.0

• 4= Major Strength; The company’s ability to respond is Customer Service 0.20 4.00 3.0 3.0
superior and the best among immediate competitors
Total 1.00

11 12

2
 4/10/2022

• Step 5: Weighted Score

• Weighted score value is the result Starbucks McDonalds Dunkin Donuts
achieved after multiplying each factor
rating with the weight Key Success Factors Weight Rating Score Rating Score Rating Score

Advertising 0.05 4.00 0.20 3.0 0.15 3.0 0.15

• Step 6: Total Score / Total Weighted
Score Product Quality 0.20 4.00 0.80 2.0 0.40 3.0 0.60

• Adding the weighted score for each Product Variety 0.10 3.00 0.30 4.0 0.40 3.0 0.30
attribute of a particular competitor
will give you the total score of that Price Competitiveness 0.20 2.00 0.40 4.0 0.80 2.0 0.40

company. Financial Position 0.05 3.00 0.15 4.0 0.20 3.0 0.15
• Final value of total weighted score
Customer Loyalty 0.10 2.00 0.20 3.0 0.30 4.0 0.40
should be between range 1.0 (low) to
4.0(high). Global Expansion 0.10 3.00 0.30 4.0 0.40 4.0 0.40

Customer Service 0.20 4.00 0.80 3.0 0.60 3.0 0.60

Total 1.00 3.15 3.25 3.00

13 14

Starbucks McDonalds Dunkin Donuts

• Compare scores and identify where a
company’s relative strengths and
Key Success Factors Weight Rating Score Rating Score Rating Score
weaknesses are.
• The competitor with the highest total Advertising 0.05 4.00 0.20 3.0 0.15 3.0 0.15
score is the strongest player in the
Compare competitive landscape. Product Quality 0.20 4.00 0.80 2.0 0.40 3.0 0.60

scores and • If you are the strongest player, you must Product Variety 0.10 3.00 0.30 4.0 0.40 3.0 0.30
work hard to retain this competitive
take action advantage. Price Competitiveness 0.20 2.00 0.40 4.0 0.80 2.0 0.40

• If you aren't, then CPM will help you Financial Position 0.05 3.00 0.15 4.0 0.20 3.0 0.15
visualize where you need to improve to
catch up with the top player(s) Customer Loyalty 0.10 2.00 0.20 3.0 0.30 4.0 0.40

Global Expansion 0.10 3.00 0.30 4.0 0.40 4.0 0.40

Customer Service 0.20 4.00 0.80 3.0 0.60 3.0 0.60

Total 1.00 3.15 3.25 3.00

15 16

Starbucks McDonalds Dunkin Donuts

Any Questions
Key Success Factors Weight Rating Score Rating Score Rating Score

Advertising 0.05 4.00 0.20 3.0 0.15 3.0 0.15

Product Quality 0.20 4.00 0.80 2.0 0.40 3.0 0.60

Product Variety 0.10 3.00 0.30 4.0 0.40 3.0 0.30

Price Competitiveness 0.20 2.00 0.40 4.0 0.80 2.0 0.40

Financial Position 0.05 3.00 0.15 4.0 0.20 3.0 0.15

Customer Loyalty 0.10 2.00 0.20 3.0 0.30 4.0 0.40

Global Expansion 0.10 3.00 0.30 4.0 0.40 4.0 0.40

Customer Service 0.20 4.00 0.80 3.0 0.60 3.0 0.60

Total 1.00 3.15 3.25 3.00

17 18