Competitive Profile Matrix: A Theoretical Review

Abstract

A Competitive Profile Matrix (CPM) is an analytical tool that provides necessary information of competitive advantage based on critical success factors and serves as the basis for an organization’s strategy. This paper provides for understanding the basic concepts of CPM and its usability in strategy formulation. The study finds that although CPM helps decision makers in some points of strategy formulation, it does not depict a clear picture of the competitive situation because of its subjective selection and assessment of critical success factors and the lack of robustness in calculation in terms of assigning weights and ranks. However, the usability of CPM can be improved by integrating some other sophisticated tools, for example, Internal Factor Evaluation Matrix (IFEM), External Factor Evaluation Matrix (EFEM), Analytic Hierarchy Process (AHP), and ELECTRE III. This integration will ensure more robust calculation of the weights and rank assigned to each critical success factor upon which CPM is built and lead to successful strategy formulation.