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Directional Policy Matrix (Shell/DPM)

L1StrategyGrowth and portfoliodecisionStages 4 to 5

Reference model

The Directional Policy MatrixA three-by-three grid. Columns are business sector prospects (unattractive, average, attractive); rows are the company’s competitive capabilities (strong, average, weak). Each cell names a policy: cash generation, growth, leader, phased withdrawal, custodial, try harder, disinvest, phased withdrawal and double or quit.BUSINESS SECTOR PROSPECTSUNATTRACTIVEAVERAGEATTRACTIVEStrongAverageWeakCOMPETITIVE CAPABILITIESCash generationGrowthLeaderPhased withdrawalCustodialTry harderDisinvestPhased withdrawalDouble or quitRate each business on both axes (1–5); the cell where they meet names the policy.Use it as a second opinion beside the nine-box: where they disagree, look again at the evidence.

Business sector prospects across, the company’s competitive capabilities down. Every cell names the policy to follow.

About this model

Sets each business’s sector prospects against the company’s competitive capabilities on a nine-cell grid, and gives each cell a named policy: leader, growth, try harder, double or quit, custodial, cash generation, phased withdrawal or disinvest. Often used as a second opinion beside the GE–McKinsey nine-box.

S. J. Q. Robinson, R. E. Hichens & D. P. Wade — “The Directional Policy Matrix: Tool for Strategic Planning”, Long Range Planning (Shell Chemicals) · 1978

How to read it

  • Rate the prospects of each business’s sector (market growth, market quality, availability of inputs, environmental aspects) and your capabilities in it (market position, production capability, product development), each from 1 to 5.
  • The cell where the two ratings meet names the policy: for example strong capability in an attractive sector is “leader”, weak capability in an attractive sector is “double or quit”.
  • Use it to cross-check the nine-box: where the two disagree, find out why before committing capital.

What this does

An alternative to the GE-McKinsey grid for the same job — plotting market attractiveness against competitive capability to guide investment.

When to use it

Maturity, as a second-opinion cross-check alongside or instead of the 9-Box Matrix.

Not when: As a first-choice tool — this exists as a cross-check once the GE-McKinsey 9-Box has already been run, not a replacement for it.

What happens next

Feeds the same downstream investment decisions as the 9-Box Matrix.

Golden thread

Builds on ←

    A starting point: it needs no earlier tool.

    Feeds into →

    • financial

    Framework library: Strategy and environment (layer L1), lifecycle stages 4 to 5.

    Use this tool, free

    Sign in to open the worksheet. Your work saves as you type, the AI can draft the parts you have not filled in, and you finish with an analysis and a 30/60/90-day action plan.

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    Hand-built by Eccellere and reviewed by Eccellere on 02/11/2026. Guidance, not advice: apply your own judgement.