The document describes Hofers's product-market matrix, which plots a company's products across two dimensions: competitive position and market/industry stage of evolution. It identifies five strategic positions - A, B, C, D, and E - based on where a product falls in the matrix. Position A products have strong competitive positions in growing markets and deserve large investments to sustain leadership. Position B products are also in growing markets and need expansion strategies. Position C products have strong positions but are entering the shakeout stage. Position D products have average positions and can generate cash flow. Position E products are likely uncompetitive and should be considered for divestment.

2. HOFER’S PRODUCT-MARKET MATRIX
Development
Maturity/saturation
Shake out
Growth
Decline
WEAKAVERAGESTRONG
E
D
C
B
A
HIGH POTENTIAL AND DESERVES EXPANSION
STRATEGIES THROUGH LARGE INVESTSMENTS
HAS A STRONG COMPETITIVE POSITION.
NEEDS EXPANSION STRATEGIES AS THE
PRODUCT ENTERS IN SHAKE-OUT STAGE.
IS PROBABLY A “DOG”
CAN BE USED FOR CASH GENERATION &
DIVERTED TO A & B
POTENTIAL LOSER & MAY BE CONSIDERED FOR
DIVESTMENT
COMPETITIVE POSITION
MARKETEVOLUTION/INDUTRYSTAGE

3. ADVANTAGES
• CAN BE USED TO IDENTIFY AND TRACK DEVELOPING WINNERS
• ILLUSTRATES HOW THE FIRM’S BUSINESSES ARE DISTRIBUTED ACROSS THE STAGES OF INDUSTRY
EVOLUTION

4. DIRECTIONAL POLICY MATRIX
LOSS MAKING UNITS FALLS HERE.
NO FUTURE PROSPECTS THAT’S WHY DIVEST.
RELEASED RESOURCES CAN BE PUT TO
ALTERNATIVE
BOTH MATRIX ARE ON POSITIVE SIDE.
MUST RECEIVE TOP PRIORITY SO TO SUSTAIN
LEADERSHIP
OPERATIONS CAN BE CONTINUED FOR CASH
FLOWS AND PROFIT. WHICH CAN BE FURTHER
REMITTED TO OTHER UNITS IN NEED.