Strategic matrix

strategic matrixStrategic matrix are a set of analytical tools which help us to select the appropriate strategy for each of the company's products / services or each of its lines or business units.

The field of strategic management adopted the concept of the mathematical matrix as a representation of ordered and structured data in rows and columns which form a single structure. Based on this concept, the strategic analysis has developed various tools that allow us to sort, classify and summarize our portfolio of products / services or business lines, as well as to weigh and recommend the possible strategies to each one of them.

Most of the strategic matrix represent the positioning of our company through its products / services or lines of business over those of the competition, thanks to this comparison and taking into account other factors that influence the success of the company it will help to make the best decision at the level of corporate strategy.

The analysis of corporate strategies is vital importance, since it will mark the future of our company by indicating in which lines of business we have to invest, improve, expand, disinvest or even close.

There are several strategic matrix that perform their analysis under different points of view, among them we can mention:

Advantages of strategic matrix

The main advantage of strategic matrix is that they allow us to represent at a glance a classification of our product portfolio, allowing us to communicate it to the rest of the team in a simple, visual and easy way.

They allow us to simulate the impact of a strategy on a specific product or line of business on the overall strategy of the company.

On the other hand, the methodology for the construction of a strategic matrix is very simple.

Disadvantages of strategic matrix

Each of the matrix analyzes the data under 2 dimensions or variables, so all the possible factors that affect our business portfolio are not taken into account, simplifying too much the reality whose results in inexpert hands can lead to wrong decisions at a strategic level.

We may have difficulty in obtaining the necessary information to build our matrix, often using approximations and estimates data which may affect the results.

The people who carry out the data acquisition and analysis of the matrix must be knowledgeable experts of the sector as well as of the businesses of their company, having a level of balanced self-criticism.

Most matrix have a financial approach, leaving aside other dimensions of the company such as innovation, the human factor ... that influence the success of the organization.

Conclusions of the strategic matrix

With all this, the conclusions provided by the strategic matrix must not be definitive, but rather orientative, allowing us to better understand our portfolio of products / services and businesses.

It is important to stress that strategic matrix are analytical and not decision tool, due to their limitations and disadvantages this type of tools has to serve as a guide when making strategic decisions, being complementary with other tools such as SWOT analysis, PESTEL ...

 

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