Use of Matrix in Business Mathematical Induction
Apart from the use of matrices in mathematics, in the business matrices are used to present various concepts involving the division of some meaning according to at least two criteria.
One of the most popular matrices used in strategic management is the BCG matrix developed by Boston Consulting Group. It presents different business units or major product lines based on their relative market share and the growth rate of the market. Funny graphical representation of BCG matrix:
Second matrix worth describing is McKinsey nine-field analysis (9W analysis) of the company’s production portfolio. This matrix consists of two variables: attractiveness of the industry and assessment of the competitive position and financial strength of the company.
The last one worth noticing is Hofer matrix. It is created on the basis of two criteria: the maturity of the sector, divided into 5 phases and the competitive position of companies in the sector. In this way circles are created, which represent different areas of activity in the company, and the size of the circle is proportional to size of the sector. Sometimes segments could be added to the circle, which reflect the market share of company in the sector.
Very good book about various uses of 2×2 matrices in business, management and decision making is: The Power of the 2 x 2 Matrix: Using 2 x 2 Thinking to Solve Business Problems and Make Better Decisions 1st Edition by Alex Lowy and Phil Hood, it is available on Amazon.