An Effective Tool!

The 2*2 Matrix is a simple but invaluable tool to understand problems and scenarios. And it can be used in any situation. Some of the best known models that most of us are likely to be familiar with are based on the 2*2 matrix – the BCG Model and the Ansoff Matrix being examples – and if one could identify the right variables to put on the two axes, one could get four meaningful scenarios. Let’s look at three of the very famous ones:

1. The BCG Model is a great model to analyse CATEGORIES (but NOT brands). One axis looks at the market growth rate, the other at relative market share. And such a simple model has made cash cows, rising stars, problem children and dogs familiar to all marketers.

2. The Ansoff Matrix looks at alternative growth models for a company. The two variables that the Ansoff Matrix looks at are products (existing and new) and markets (existing and new). From these, the matrix looks at four different scenarios. The four quadrants offer logical strategies and many of you would have used the matrix previously.

3. Porter’s Generic Strategies Model that he propounded in his 1980 book – Competitive Strategy – has Strategic Scope and Strategic Strength on the two axes. From his matrix, Porter describes three generic strategies – Cost Leadership, Differentiation (creating unique products and services) and Focus (offering specialisation in a niche market). He subdivided Focus into two parts – Cost Focus and Differentiation Focus.

If you do want to analyse anything, do consider whether the 2*2 matrix would make sense. Of course, you may need to practice with certain variables and most of your matrices may end up NOT making any sense. However, it is possible that you may hit upon a meaningful matrix that could provide you with some meaningful scenarios and strategies.

Strategic Matrix

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This article was written by andy

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