Directional Policy Matrix & Its Own Set Of Limitation

Note: DPM = Directional Policy Matrix

=> Directional Policy Matrix can operate when the economies of scale are achievable in production and distribution.
=> It is time consuming – But present business market is very much dynamic in nature where decision must be taken on time. That’s why many marketers don’t want to follow that matrix.
=> Dependent on judgment - depends on management politics, influence and negotiation. (It cannot provide ultimate decision)

·         The core competencies of the firm or the corporation are not represented in this analysis. It can be a deciding factor while judging the competitive strength of the SBUs.

A specific factor that a business sees as central to the way the company or its employees work. It fulfills three key criteria - It is not easy for competitors to imitate.

·         The relative weight given to each of the factors of competitive strength and market competitiveness is often arbitrary (Different Preferences). Any Analytic Hierarchy Process (analyzing complex decisions based on Mathematics and Psychology) is not used. This can throw the SBU on the matrix in criticism.

·         Interaction between SBUs is not considered

·         Scoring is personal and subjective (risk of bias)

·         DPM offers a broad strategy which requires extensive data gathering and does not indicate how best to implement it.

Recommendation Statement

It would be wise to use them primarily as an overview or as a complement to other analytical techniques in the organizational strategy.