Definition Priority Matrix
One of Time
Management Techniques is The
Priority Matrix is also called The Eisenhower Method or ABC Analysis. The
priority matrix is a very simple but very effective tool for helping us get
through the tasks we have. It is especially useful for those that have problems
with too much work on our plate, or can't seem to get to the work we want to do
because new jobs keep hitting our desk from customers, phone calls or new projects.
CAN YOU DISCUSS THE STEPS IN CONDUCTING THE ANALYSIS USING
THIS MODEL?
By using the priority matrix we can decide which tasks
get our attention immediately and which ones get left to a later time.
The
Priority Matrix has two dimensions. The first one is importance (important and
not important), and the second one is urgency (urgent and not urgent).
All our tasks are divided into four
quadrants: important and urgent, important and not urgent, not important and
urgent, not important and not urgent. We classify each task according to these
quadrants, and then we deal with the tasks according to the quadrant they
belong to.
Quadrant 1: Important
and Urgent
Obviously, we need to do the
tasks in this quadrant because they’re important, and we should do them first
because they are urgent. Usually, if we’re short on time we should do these
tasks first. Sometimes, we don’t have a choice, but letting things get to this
point has a negative effect on our performance and quality of life. Later, we
will discuss how to reduce the number of such tasks.
Quadrant 2: Important
and Not Urgent
We take care of tasks in this
quadrant after we deal with the tasks in Quadrant 1.
The tasks in Quadrant 2 are not
urgent, but we have to take them very seriously because, if we don’t, they will
move to Quadrant 1.
It’s better to take care of our
tasks before they appear in Quadrant 1. Why? Because there are at least two
problems with Quadrant 1 tasks: We have to deal with them quickly, and that can
cause stress and worry and even effect the quality of our work.
So, Quadrant 2 (important and not
urgent) deserves serious attention. Monitor this quadrant carefully. If needed,
divide the tasks into subtasks. Start the tasks on time, even if they don’t
look urgent now. Otherwise, you will spend a lot of effort with questionable
results, and paying attention to Quadrant 2 will result in good performance
while keeping a good quality of life.
Quadrant 3: Not
Important and Urgent
Why should we bother with tasks
that are not important? Why are they urgent? Many times other people try to
force us to deal with these tasks. They are the time robbers. The way to reduce
this problem is simply to protect your time.
For example, if someone insists
on talking with you in person immediately, and it means you need to travel out
of your office, find out why that meeting is so urgent. Maybe you can have a
phone call instead, and maybe that person is going to be in your area next
week. Protect your time.
Quadrant 4: Not
Important and Not Urgent
The tasks in this quadrant are
serious time wasters. When you identify a task in that quadrant, try to cancel
it. If you can’t eliminate it completely, try to minimize the time you spend on
that task.
WHAT ARE THE FIVE ADVANTAGES OF THIS MODEL? What are the FIVE DRAWBACKS
OF THIS MODEL?
Advantages and Disadvantages of
the Methods
Each method described above has
its own advantages and disadvantages. A brief comparison between the methods is
carried out in the following section.
Advantages
General advantages of all
Function Analysis methods include:
Helps to structure the problem under
investigation.
Aids in reaching a consensus between study participants;
including focusing and making sure they all pull in the same direction.
Defines the ‘needs’ and ‘wants’ of the customer.
Ensures a deeper understanding of the problem or
project.
Encourages information sharing between
participants.
It ensures a customer focus whilst keeping
objective about the problem
Supporting the process of generating creative
alternative solutions
Can be used to improve any organization or any
product or service
Is a way to do “data-driven decision-making” as
opposed to “fire-fighting”
Easy for everyone to understand
Technically simple – Excel is sufficient
Customer priorities become clear
Shows managers where to focus attention
Effects of improvements on customer or employee
satisfaction can be measured
New demands by customers become visible
Disadvantages
Some disadvantages of the
traditional Function Analysis methods described above include:
They are usually cumbersome to structure.
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Participants have normally not come across the
technique employed before and, therefore, have to learn it in a ‘live’ situation
which may cause problems.
They can be time consuming to construct due to semantically
arguments
Constructing the hierarchical tree structure can
take a long time due to differences of opinion between participants.
The skill of the facilitator is important when
conducting a traditional Function Analysis.
Does the end product justify the time spent
achieving it? Value = cost/worth?
WHAT INFO WE USUALLY SEEK FROM THE
ANALYSIS USING THIS MODEL?
The Urgent/Important Matrix is a powerful way of thinking
about priorities. Using it helps you overcome the natural tendency to focus on
urgent activities, so that you can keep clear enough time to focus on what's
really important. This is the way you move from "firefighting" into a
position where you can grow your business and your career.
Here's how it works:
The matrix can be drawn as shown in figure 1, with the dimensions of Importance
and Urgency.
Figure 1 – The Urgent/Important Matrix
Follow the steps below to use the
matrix to prioritize your activities:
1.
The first step is to list all the
activities and projects that you feel you have to do. Try to include everything
that takes up your time at work, however unimportant. (If you manage your time
using a To-Do List or Action Program, you
should have done this already.)
2.
Next, on a scale of 1 to 5, assign
importance to each of the activities. Remember, this is a measure of how
important the activity is in helping you meet your goals and objectives. Try
not to worry about urgency at this stage.
3.
Once you've assigned an importance
value to each activity, evaluate its urgency. As you do this, plot each item on
the matrix according to the values that you've given it.
4.
Now study the matrix using the
strategies described below to schedule your priorities.
BCG MATRIX
1)
CAN
YOU DISCUSS THE STEPS IN CONDUCTING THE ANALYSIS USING THIS MODEL?
Boston Consulting Group (BCG)
Matrix is a four celled matrix (a 2 * 2
matrix) developed by BCG, USA. It is the most renowned corporate portfolio
analysis tool. It provides a graphic representation for an organization to
examine different businesses in it’s portfolio on the basis of their related
market share and industry growth rates. It is a two dimensional analysis on
management of SBU’s (Strategic Business Units). In other words, it is a
comparative analysis of business potential and the evaluation of environment.
According to this matrix, business
could be classified as high or low according to their industry growth rate
and relative market share.
Relative Market Share = SBU Sales this year leading competitors sales this
year.
Market Growth Rate = Industry sales this year - Industry Sales last
year.
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The analysis requires that both
measures be calculated for each SBU. The dimension of business strength,
relative market share, will measure comparative advantage indicated by market
dominance. The key theory underlying this is existence of an experience curve
and that market share is achieved due to overall cost leadership.
BCG matrix has four cells, with the
horizontal axis representing relative market share and the vertical axis
denoting market growth rate. The mid-point of relative market share is set at
1.0. if all the SBU’s are in same industry, the average growth rate of the
industry is used. While, if all the SBU’s are located in different industries,
then the mid-point is set at the growth rate for the economy.
Resources are allocated to the
business units according to their situation on the grid. The four cells of this
matrix have been called as stars, cash cows, question marks and dogs. Each of
these cells represents a particular type of business.
Figure:
BCG Matrix
- Stars-
Stars represent business units having large market share in a fast growing
industry. They may generate cash but because of fast growing market, stars
require huge investments to maintain their lead. Net cash flow is usually
modest.
- Cash Cows-
Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and
generate cash that can be utilized for investment in other business units.
- Question Marks-
Question marks represent business units having low relative market share
and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. They require attention to determine if the
venture can be viable. Question marks are generally new goods and services
which have a good commercial prospective. There is no specific strategy
which can be adopted.
- Dogs-
Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. Due to low
market share, these business units face cost disadvantages.
2)
WHAT ARE THE FIVE ADVANTAGES OF THIS
MODEL?
1)
The BCG-Matrix is helpful for managers to evaluate balance in
the companies’s current portfolio of Stars, Cash Cows, Question Marks and Dogs.
2)
BCG-Matrix is applicable to large companies that seek volume and
experience effects.
3)
The model is simple and easy to understand.
4)
It provides a base for management to decide and prepare for
future actions.
5)
If a company is able to use the experience curve to its
advantage, it should be able to manufacture and sell new products at a price
that is low enough to get early market share leadership. Once it becomes a
star, it is destined to be profitable.
3)
What are the FIVE DRAWBACKS OF THIS
MODEL?
- BCG matrix classifies businesses as low and high, but
generally businesses can be medium also. Thus, the true nature of business
may not be reflected.
- Market is not clearly defined in this model.
- High market share does not always leads to high
profits. There are high costs also involved with high market share.
- Growth rate and relative market share are not the only
indicators of profitability. This model ignores and overlooks other
indicators of profitability.
- At times, dogs may help other businesses in gaining
competitive advantage. They can earn even more than cash cows sometimes.
4) WHAT INFO WE USUALLY SEEK FROM THE ANALYSIS USING THIS MODEL?
The Boston
Consulting Group (BCG) Matrix is a simple tool to assess a company’s position
in terms of its product range. It helps a company think about its products and
services and make decisions about which it should keep, which it should let go
and which it should invest in further.