MPP example outputs
MPP outputs include a number of matrices and charts that form the basis for analysis and strategy development.
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Marketing Portfolio Planner software
The Marketing Portfolio Planner (MPP) software utilises Professor Malcolm McDonald's Directional Policy Matrix to facilitate marketing portfolio analysis. The Directional Policy Matrix (DPM) is a graphical tool for comparing investment and market allocation opportunities. It is a plot of Market Attractiveness (the relative attractiveness of a market for investment) against Business Strengths or strengths in market (the performance of a business in a market judged against one of several Critical Success Factors (CSFs) for the various products and/or markets of a company). A key feature of the DPM is that it directly compares the opportunities offered by different markets. The program will automatically present the Matrix so that the difference between the markets is accentuated. You can, however, instruct Marketing Portfolio Planner to show the actual raw data.
This software is a standalone product available on CD direct from The Marketing Process Company, priced at £ 299 + VAT, or current US dollar or Euro equivalent. The software comes with a complete Help system and a full and extensive tutorial in its use and interpretation of the outputs. The underlying methodology, including a critique of the Boston Box, GE Matrix and Directional Policy Matrix, plus supporting text book are shown below.
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MPP methodology
The Directional Policy Matrix used in the Marketing Portfolio Planner software is an enhancement by Professor Malcolm McDonald of the GE Matrix, itself an advance on the Boston Matrix.
The approach developed by the Boston Consulting Group is fairly criticised for relying on two single factors; relative market share and market growth. To overcome this difficulty, General Electric, McKinsey and others jointly developed a multi-factor approach using the same fundamental ideas as the Boston Consulting Group. They used Market Attractiveness and Business Strengths as the two main axes and built up these dimensions from a number of weighted variables.
Using these variables, and some scheme for weighting them according to their importance, markets (or businesses) are classified into one of nine cells in a 3 x 3 matrix. Thus, the same purpose is served as in the Boston Matrix (i.e. comparing investment opportunities among markets or businesses) but with the difference that multiple criteria are used. These criteria vary according to circumstances.
The GE Matrix has since been developed by Professor Malcolm McDonald to form a simple but effective version consisting of 4 boxes. The four-box Directional Policy Matrix (DPM) defines Business Strengths in terms of Critical Success Factors (CSFs) .
The key difference from the Boston Matrix is that rather than using only two variables, the criteria which are used for each axis are totally relevant and specific to the firm applying the Matrix. It demonstrates:
- Relative attractiveness of the various markets based on criteria selected by the firm.
- Relative strengths of the firm in each of these markets.
- Relative importance of each market.
Managers are able to compare investment opportunities among markets, confident that they have selected the criteria for comparison which are most appropriate for their industry.
Supporting Text
Marketing Plans - How to prepare them, how to use them (5th Edition) |
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April 2002. McDonald. ISBN: 0750656255 |
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