Malcolm McDonald believes that a company has to make an offer to a particular market that has a sustainable advantage over the offers of the relevant competitors. The only way to do this is for the company to understand the real needs and wants of the chosen customer group. Once these have been determined, the company must find out how the needs are being currently met by the products and then the company needs to look for ways to satisfy these needs better than the competitors.
The strategic business unit that is to be analysed has the following definition (McDonald 1997)
1. It will have common segments and competitors for most of the products
2. It will be a competitor in an external market
3. It is a discreet, separate and identifiable unit
4. Its managers will have control over most of the areas critical to success
It is possible however to use the DPM for any unit that has in it a number of different variables that could be usefully plotted using a two-dimensional matrix.
Market attractiveness is a measure of the potential of the marketplace to yield growth in sales and profits. The assessment of market attractiveness should be objective and is made with data external to the organisation.
Vertical Axis