Competitive Profile Matrix (CPM) is a strategic management tool which is used to identify the major strengths and weaknesses of a firm in relation to the rival’s firm strategic position. On the basis of this comparison, the firm can design wise offensive or defensive strategies. Two types of systems can be used for the construction of competitive profile matrix i.e. weighted rating system (each measure of critical success factor is assigned a weight based on its perceived importance) and unweighted (each critical success factor measured is assumed to be equally important) rating system.  It is important to note that the meaning of weights and total weighted scores is same in both EFE (external factor evaluation) and CPM (competitive profile matrix).

Differences between EFE and CPM

Following are some of the important differences between EFE (external factor evaluation) and CPM (competitive profile matrix).

1. In competitive profile matrix, critical success factors include both internal and external issues.
2. In external factor evaluation, critical success factors are grouped into opportunities and threats whereas such grouping does not exist in competitive profile matrix.
3. In external factor evaluation, total weighted scores of a firm can not be compared to the total weighted scores of rival firms whereas such comparison is possible in competitive profile matrix.

Steps in the Construction of CPM