Many strategic planning approaches use a matrix format. Perhaps the most famous one is known as SWOT for:

• Strengths
• Weaknesses
• Opportunities
• Threats

Later we will discuss SWOT in the M&A context.

Another common approach is to conceive of possible future scenarios related to certain conditions that matter for a plan. Scenario planning comes in many varieties, but one simple approach is to show possible future conditions in a matrix format (see Exhibit 2-3). If A is high inflation and B is heavy regulation, then Scenario 1 will happen in a highly inflationary, highly regulated market; Scenario 2 will happen in an inflationary deregulated market; Scenario 3 will occur with low inflation and a low level of regulation, and Scenario 4 will happen with low inflation and high regulation. Use of such scenarios can help teams imagine different futures. Experts can advise on the likelihood of such combinations, their degree of intensity, and their impact on plans.

Another well-known approach, developed more than half a century ago by the Boston Consulting Group, segments a company’s operations into market growth/market share categories labeled as such as star for high-growth/high-share, cash cow for high-share/low-growth, wildcat (or question mark) for low-share/high growth, and dog (or pet) for low-growth/low-share.

The basic purpose of this strategy is to redeploy revenues from cash cows to wildcats. Many other such matrix approaches to diversification have also been popular, especially General Electric’s nine-element construct.

These simple constructs remain popular even as dealmakers avail themselves of new technologies to handle large data sets. While brainstorming sessions can use these constructs to organize their perceptions and plans, strategies today are supported by multivariate analyses.