What is the purpose of a portfolio matrix in a business context?

The purpose of a portfolio matrix in a business context is primarily focused on resource allocation among different products or strategic business units. This tool helps organizations assess the relative performance and market positioning of their various offerings. By categorizing products or units based on factors such as market growth and market share, businesses can identify which areas to invest more resources into, which to maintain, and which may need divestment or strategic changes.

Using a portfolio matrix allows management to visualize where their investments are concentrated and to strategize accordingly. This can involve balancing a mix of high-growth, high-return products with those that may be stable or declining, helping to ensure a diverse and sustainable business strategy. It provides valuable insights for decision-making that align with the organization's overall goals and market dynamics.