What to remember
- Define comparable units before selecting factors.
- Declare the scale and weights used on each axis.
- Test sensitivity to factors and weights.
- Treat policy zones as hypotheses, not orders.
Define both axes and their scope
Attractiveness describes the market or segment through growth, accessible margin, barriers, stability or competitive intensity. Competitive strength describes the organisation through share, commercial access, differentiation, capabilities or relative costs.
Use comparable units, a common period and stable factor definitions before weighting.
Calculate reproducible scores
Assign weights that total 100% and score every factor on a declared scale. The axis score is the sum of weight × score. Reverse inverse factors before aggregation.
Illustrative 0-to-100 example: attractiveness combines growth 40% × 80, margin 35% × 60 and barriers 25% × 40, giving 63. Strength combines share 35% × 70, distribution 35% × 80 and offer 30% × 60, giving 70.5.
| Axis | Factors | Weights | Scores | Result |
|---|---|---|---|---|
| Attractiveness | Growth · margin · barriers | 40 · 35 · 25% | 80 · 60 · 40 | 63.0 |
| Strength | Share · distribution · offer | 35 · 35 · 30% | 70 · 80 · 60 | 70.5 |
Interpret without inventing boundaries
The point locates a business within the chosen reference. Policy zones depend on the model, scale and explicitly adopted thresholds. Without governed thresholds, retain the coordinates and discuss directions without assigning an automatic zone.
Sensitivity testing shows which factors actually move the diagnosis.
Connect the matrix to a portfolio decision
The editorial connection is to Grid for DPM structure and Atlas for the decision file. It proves neither a public runtime nor automated recommendations.
Record the proposed direction, resources, trade-offs, evidence still required and the signal that will reopen the decision.
Frequently asked questions
Is DPM the same as GE-McKinsey?
Both cross attractiveness and strength, but they use distinct factors, conventions and policies. Do not merge their scores.
Which thresholds should be used?
There is no defensible universal threshold. Document the selected boundaries and test sensitivity.
Does the position determine the budget?
No. Allocation also depends on constraints, interactions, risk, cash and capacity.
Full sources
- Complete university strategy manual covering the Directional Policy Matrix, PDFComplete source available online · Read the complete source
- Directional Policy Matrix, method and limitsComplete source available online · Read the complete source
- Complete overview of the directional policy matrix, PDFComplete source available online · Read the complete source