The Competitive Profile Matrix (CPM)
The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and their particular
strengths and weaknesses in relation to a sample firm’s strategic position. The Competitive Profile
Matrix resembles an External Factor Evaluation (EFE) Matrix with a comparison to other
organizations and/or companies. The weights and total weighted scores in both a CPM and EFE
have the same meaning. However, the factors in a CPM include both internal and external issues;
therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor
strength, 2 = minor weakness, and 1 = major weakness. There are some important differences
between the EFE and CPM. First of all, the critical success factors in a CPM are broader; they do
not include specific or factual data and even may focus on internal issues. The critical success
factors in a CPM also are not grouped into opportunities and threats such as they are in an EFE. In
a CPM the ratings and total weighted scores for rival firms can be compared to the sample firm.
This comparative analysis provides important internal strategic information.
Some of the important steps involved in the construction of a Competitive Profile Matrix are
given below.
1. In the first column, lists down all the key success factors of Industry (usually from 6 to 10).
2. In the second column, assign weights to each factor ranging from 0.0 (not important to 1
(most important). Greater weights should be given to those factors which have grater
influence on the organizational performance. The sum of all weights must equal 1.
3. Now rate each factor ranging from 1 to 4 for all the firms in analysis. Here, rating 1
represents major weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates
minor strength whereas rating 4 shows major strength. It means that weakness must receive
1 or 2 rating while strength must get 3 or 4 rating.
4. Calculate weighted score by multiplying each factor’s score by its rating.
5. Find the total weighted score of all the firms by adding the weighted scores for each
variable.
, TOWS Matrix – Threats Opportunities Weaknesses Strengths Matrix
SWOT Analysis is a regularly used strategic management paradigm that examines an industry's
internal strengths and weaknesses as well as its possibilities and threats from the outside world.
By conquering threats, this will assist in concentrating on the strengths, minimizing weaknesses,
and maximizing the use of opportunities. If the SWOT analysis is not combined with a TOWS
analysis, where the strengths are applied to seize opportunities, mitigate threats, and reduce
weaknesses using opportunities, it becomes a pointless exercise.
For constructing alternative tactics, the TOWS matrix identifies four fundamentally separate
strategic groups: Strength-Opportunity (SO), Strength-Threats (ST), Weaknesses-Opportunities
(WO), and Weaknesses-Threats (WT). Although strategies are the main focus of this research, it
might also be used to design the tactics required to put those strategies into practice as well as
more targeted activities that support those tactics.
Scenario Planning as a Strategic Management Tool
During the Second World War, when nations were preparing for many possibilities, formal
scenario planning first evolved as a part of military strategy. Since that time, scenario planning has
grown in popularity.
In order to organize one's vision of potential future environments in which one's decision might be
made today, one can use scenarios. In actuality, scenarios resemble a collection of oral or written
narratives with meticulously crafted plots. Multiple viewpoints on complicated events can be
expressed in these stories, and scenarios give these occurrences context. Because the future is
uncertain, scenarios are effective planning tools. Scenarios give alternative visions as opposed to
extrapolating current patterns from the present, as is the case with conventional forecasting or
market research.
Putting scenario planning into practice
The Competitive Profile Matrix (CPM) identifies a firm’s major competitors and their particular
strengths and weaknesses in relation to a sample firm’s strategic position. The Competitive Profile
Matrix resembles an External Factor Evaluation (EFE) Matrix with a comparison to other
organizations and/or companies. The weights and total weighted scores in both a CPM and EFE
have the same meaning. However, the factors in a CPM include both internal and external issues;
therefore, the ratings refer to strengths and weaknesses, where 4 = major strength, 3 = minor
strength, 2 = minor weakness, and 1 = major weakness. There are some important differences
between the EFE and CPM. First of all, the critical success factors in a CPM are broader; they do
not include specific or factual data and even may focus on internal issues. The critical success
factors in a CPM also are not grouped into opportunities and threats such as they are in an EFE. In
a CPM the ratings and total weighted scores for rival firms can be compared to the sample firm.
This comparative analysis provides important internal strategic information.
Some of the important steps involved in the construction of a Competitive Profile Matrix are
given below.
1. In the first column, lists down all the key success factors of Industry (usually from 6 to 10).
2. In the second column, assign weights to each factor ranging from 0.0 (not important to 1
(most important). Greater weights should be given to those factors which have grater
influence on the organizational performance. The sum of all weights must equal 1.
3. Now rate each factor ranging from 1 to 4 for all the firms in analysis. Here, rating 1
represents major weakness, rating 2 shows minor weakness. Similarly, rating 3 indicates
minor strength whereas rating 4 shows major strength. It means that weakness must receive
1 or 2 rating while strength must get 3 or 4 rating.
4. Calculate weighted score by multiplying each factor’s score by its rating.
5. Find the total weighted score of all the firms by adding the weighted scores for each
variable.
, TOWS Matrix – Threats Opportunities Weaknesses Strengths Matrix
SWOT Analysis is a regularly used strategic management paradigm that examines an industry's
internal strengths and weaknesses as well as its possibilities and threats from the outside world.
By conquering threats, this will assist in concentrating on the strengths, minimizing weaknesses,
and maximizing the use of opportunities. If the SWOT analysis is not combined with a TOWS
analysis, where the strengths are applied to seize opportunities, mitigate threats, and reduce
weaknesses using opportunities, it becomes a pointless exercise.
For constructing alternative tactics, the TOWS matrix identifies four fundamentally separate
strategic groups: Strength-Opportunity (SO), Strength-Threats (ST), Weaknesses-Opportunities
(WO), and Weaknesses-Threats (WT). Although strategies are the main focus of this research, it
might also be used to design the tactics required to put those strategies into practice as well as
more targeted activities that support those tactics.
Scenario Planning as a Strategic Management Tool
During the Second World War, when nations were preparing for many possibilities, formal
scenario planning first evolved as a part of military strategy. Since that time, scenario planning has
grown in popularity.
In order to organize one's vision of potential future environments in which one's decision might be
made today, one can use scenarios. In actuality, scenarios resemble a collection of oral or written
narratives with meticulously crafted plots. Multiple viewpoints on complicated events can be
expressed in these stories, and scenarios give these occurrences context. Because the future is
uncertain, scenarios are effective planning tools. Scenarios give alternative visions as opposed to
extrapolating current patterns from the present, as is the case with conventional forecasting or
market research.
Putting scenario planning into practice
