MCC matrix stands for Mission and Core Competencies Portfolio Decision Matrix
John Nicholls who suggested that, rather than throw away all the tools and ideas that have been used in developing strategy in the past developed this matrix, one should update these.
Nicholl designed the MCC matrix to assist in defining where the projects/products or SBU’s lie with regard to core competencies and the mission of the organisation so that scarce resources can be accurately allocated.
Core competencies have been defined as a set of business processes strategically understood
The mission refers to the values that feed the organisation. The importance of vision and values that are expressed in the mission statement is an essential part of the new thinking of strategy, according to Nicholls.
Both the mission and the core competencies form part of the basic ingredients necessary to guide the management of an organisation in achieving its fundamental purpose of delivering value to the customer. Scarce resources should be allocated to activities that strengthen the core competencies and help achieve the mission of the organisation.
The y-axis of this matrix is made up of the ‘Fit for Mission’. The axis is divided into two halves representing a good fit or a poor fit.
The x-axis or horizontal axis is made up of ‘Fit with core competencies’ and again the axis is divided into two halves representing a good fit or a poor fit.
The matrix is divided into four quadrants – dilution, drive, drain and distraction.
An organisation is at its strongest when all its resources are devoted to drives and none to drains i.e. when everything it does helps to fulfil its mission while using and strengthening its core competencies
Projects which fit both mission and core competencies are called Drives and are to be cherished, those fitting neither are called Drains while those falling in the other two quadrants are called Dilutions if they fit the mission and Distractions if they fit the core competencies.
Dilutions and Distractions must not be ignored but must be changed into Drives.
Nicholls also developed a three by three version of the MCC matrix and this nine-box matrix is a more qualitative one.