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Shell Directional Policy Matrix

The Shell Directional Policy Matrix is a refinement of the Boston Matrix that evaluates a company's strategic business units across two axes: prospects for sector profitability and competitive capability. It divides businesses into 9 cells that each recommend a different strategic approach, such as focusing major resources on "Leader" businesses, growing "Growth" businesses enough to exploit potential, and phasing out or divesting from "Withdrawal" and "Divest" businesses with low potential.

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Arjun Ahuja
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1K views

Shell Directional Policy Matrix

The Shell Directional Policy Matrix is a refinement of the Boston Matrix that evaluates a company's strategic business units across two axes: prospects for sector profitability and competitive capability. It divides businesses into 9 cells that each recommend a different strategic approach, such as focusing major resources on "Leader" businesses, growing "Growth" businesses enough to exploit potential, and phasing out or divesting from "Withdrawal" and "Divest" businesses with low potential.

Uploaded by

Arjun Ahuja
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Shell Directional Policy Matrix

A Nine Celled directional Policy Matrix


The Shell Directional Policy Matrix is another refinement upon the Boston Matrix. Along the horizontal axis are prospects for sector profitability, and along the vertical axis is a company's competitive capability. As with the GE Business Screen the location of a Strategic Business Unit (SBU) in any cell of the matrix implies different strategic decisions.

Each of the zones is described as follows:


Leader - major resources are focused upon the SBU. Try harder - could be vulnerable over a longer period of time, but fine for now. Double or quit - gamble on potential major SBU's for the future. Growth - grow the market by focusing just enough resources here. Custodial - just like a cash cow, milk it and do not commit any more resources. Cash Generator - Even more like a cash cow, milk here for expansion elsewhere. Phased withdrawal - move cash to SBU's with greater potential. Divest - liquidate or move these assets on a fast as you can.

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