Strategic Marketing: Planning and Control, Third Edition

On the basis of these criteria and on an agreed weighting scheme, a SBU
or product is then positioned on the matrix, which is divided into nine
separate cells, three on each axis (see Figure 5.10). The SBU or product is
represented on the matrix by a circle. The circle’s area represents the sales
volume of the business/product as a percentage of the overall business.
On occasion the circle represents the size of the market and a slice of the
circle is shaded to represent the business’s share of that market.

● The Shell directional policy matrix
Takes a similar approach to the general electric multifactor matrix (see
Figure 5.11). In both models the cells contain policy recommendations
for businesses/products that fall within their boundaries. For instance
for products that fall in the cell that represents high-industry attrac-
tiveness and strong-business strength, on the General Electric multi-
factor model, the policy recommendation is to invest for growth.
In both these models the number of factors considered as important on
both axis, and their relative weighting, are based on managers’ subjective
judgements. This is a major criticism of these more sophisticated portfo-
lio models. However, this ability to use judgement, based on their knowl-
edge of their markets and industry, does allow managers to adapt the
model to an organisation’s specific situation. The models are also criti-
cised as being more difficult for managers to use and more time consum-
ing than the BCG matrix.

Internal analysis 105

High

9

Medium

6

Low

3

9

Strong

603

Medium Weak

0

Industry attractiveness

Business strengths

Invest for growth

Manage selectively for earnings

Harvest/withdraw

Figure 5.10

The General Electric

multifactor matrix