Strategic Portfolio Matrices: The Strategy-Risk-Growth- Newness (SRGN) Decision Matrix and the Innovation-Risk Matrix (IRM)

Abstract

A corporate strategy follows the portfolio approach to make a number of decisions about how the company will achieve its objectives specified in its mission statement with its resources efficiently and effectively. A company has many different corporate strategies to choose from for its profit, growth, and competitive advantage. The option is not, as such, costless. Each and every corporate strategy is associated with a level of risk. The risk-taking behavior significantly varies from organization to organization, particularly in choosing the corporate strategy. The present paper proposes two strategic matrices (and another one derived from the two) to deal with corporate risks involved in choosing corporate strategies and degree of newness of a company’s product. The first matrix is known as the Innovation-Risk Matrix and the second one is known as the Strategy-Risk-Growth-Newness (SRGN) Decision Matrix. These two matrices simultaneously help manufacturing companies to choose the appropriate level of risk versus the degree of newness of its products, and the best suited corporate strategies.