Toolbox Exercise – Competitive Profile Matrix (CPM)
NOTE REGARDING TOOLBOX EXERCISES – These exercises are meant to be cumulative in nature. Each week we will perform an exercise that will serve as the foundation for your Strategic Plan and Final Presentation. Your frame of reference for these exercises should be the shoe company you manage on the Business Simulation Game.
This exercise is used as a tool to help identify a firm’s major competitor and the strengths and weaknesses of both the firm and the competitors. Note: this tool includes both internal and external issues, but in a broader context than the IFE and EFE matrices.
· Identify 5 to 10 critical success factors. These items are more important for any company competing in the industry. Examples: market share, product quality, brand recognition, distribution network, supply network, location, production capacity, etc…
· If the list is rather lengthy, you may eliminate the less important items and repeat the exercise. For example, eliminate the bottom 20-30% of the items which got no or few votes.
· Calculate the average score for each item. This will become the weight to be used in the next step. The total should be 100. If you need to make minor adjustments to the score to equal 100, do so.
· Define your main competitors. List your company and your competitor on the top of the matrix (please refer to example).
· Now rate how each company is doing in regards to each critical success factor and rate using a scale of 4 = major strength, 3 = minor strength, 2 = minor weakness, and 1 = major weakness.
· Computer and note the weighted score for each item by multiplying the weight times the rating. For example, an item with a weight of 25 and a score of 2, the weighted score would be 50.
· Add all the scores to get a total score for each company on the CPM.