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Shell's Directional Policy Matrix Explained

The Shell Directional Policy Matrix is a refinement of the Boston Matrix that evaluates a company's strategic business units (SBUs) based on their competitive capability and the prospects for sector profitability. The matrix divides SBUs into nine cells that imply different strategic decisions: leader, try harder, double or quit, growth, custodial, cash generator, phased withdrawal, and divest.

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Harman Gill
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131 views2 pages

Shell's Directional Policy Matrix Explained

The Shell Directional Policy Matrix is a refinement of the Boston Matrix that evaluates a company's strategic business units (SBUs) based on their competitive capability and the prospects for sector profitability. The matrix divides SBUs into nine cells that imply different strategic decisions: leader, try harder, double or quit, growth, custodial, cash generator, phased withdrawal, and divest.

Uploaded by

Harman Gill
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

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. 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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