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Matrix Models for Strategic Planning-- some cautionary notes

Advantages
Key areas. These models highlight certain aspects of business that are considered essential to success or failure
Cash flows. They often focus on cash flow requirements of the SBU's of a business. They help identify the different cash flow implications and requirements of different business activities that can assist management to carry out its resource allocation function.
Balance portfolio. They help identify ways to balance and optimize the value of the corporate portfolio. This can be done by identifying strengths and weaknesses in the portfolio, the gaps that need to be filled to rebalance it; when a new SBU needs to be added or when one needs to be removed. It can also tell when there are too many duplicative businesses of one type in a portfolio.
Diverse perspective. They enable managers to examine diverse activities of a multibusiness company in a systematic fashion, and attempt to make some sense out of enterprise diversity.
Flexible comparisons. Some matrices, like the McKinsey Matrix, are highly flexible in being able to select different factors for different industries. This kind of analysis can provide coverage of a wide number of strategically relevant variables.
Return on Investment. ROI is often used as a single measure of organizational performance because it is a single comprehensive figure, it checks accuracy of capital investment proposals, provides a common denominator for comparison across entities, and is an incentive to using assets efficiently.
Disadvantages
Too simple. Matrix models are often criticized for being too simplistic. For so many important factors to be reduced to only two dimensions (e.g., market share and business attractiveness) other factors are necessarily excluded or lose their distinctiveness in the collapsed dimensions.
Market share mismeasure. Market share, though used widely, may not be the best measure of a company's...