Matrix models break down multiplication problems into simpler parts by placing the tens and ones values of each number into a grid. The values are then multiplied in each box and summed to obtain the final answer. An example problem shows 96 x 23 broken into 90 x 20, 6 x 20, 90 x 3, and 6 x 3 in the boxes, which are then added to get the solution of 2208.