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Shell Directional Policy Matrix Explained

The Shell Directional Policy Matrix refines the Boston Matrix by plotting a company's strategic business units along axes of industry profitability prospects and competitive capability. As with prior matrices, the location of a unit within the cells implies different strategic decisions, though in practice the zones are irregular and blend together. The matrix describes eight zones requiring strategies such as focusing major resources, growing the market with minimal resources, or phasing withdrawal and divestment.

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48 views1 page

Shell Directional Policy Matrix Explained

The Shell Directional Policy Matrix refines the Boston Matrix by plotting a company's strategic business units along axes of industry profitability prospects and competitive capability. As with prior matrices, the location of a unit within the cells implies different strategic decisions, though in practice the zones are irregular and blend together. The matrix describes eight zones requiring strategies such as focusing major resources, growing the market with minimal resources, or phasing withdrawal and divestment.

Uploaded by

Ravena Smith
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd

Shell 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. However decisions often span options and in practice the zones are an irregular
shape and do not tend to be accommodated by box shapes. Instead they blend into each
other.

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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