The principal purpose of analysis for strategic planning is to identify the major opportunities and threats a business unit faces in the future and to identify the skills around which it can develop a strategy to exploit the opportunities and negotiate around the threats.
Hofer and Schendel felt that the major weakness with the General Electric business screen was that it didn’t effectively depict the positions of new businesses that are just starting to grow in new industries.
They suggested in 1975 that changes in basic competitive positions are easier to accomplish at certain stages in the evolution of an industry than others. The Boston Consulting Group also alluded to this with their assumption that market growth was related to life cycle and was used as the one axis on their matrix.
The competitive position / market evolution matrix was developed in the late 1970’s by Charles W. Hofer and Dan Schendel.