What is Hofer Matrix?
The Hofer Matrix is a tool to determine a company's competitive position by identifying internal and external factors. It is often used for business portfolio analysis, which is very similar to BCG and McKinsey GE Matrix. You can use this matrix when an organization wants to know which product(s) to put resources into. It can be used effectively to balance a company's product portfolio.
How to Use the Hofer Matrix?
Charles Hoffer proposed a 3 x 5 matrix in which businesses are plotted in terms of product/market evolution and competitive position. Thus Hofer’s product-market evolution model is a 15 cell matrix of a firm’s business. Hoffer's product market evolution matrix adds additional cells to the display of market evolution and business position and uses a finer grid. The relative size of the industry is shown in circles, and the shadow of the business’s market share is shown in this template.
Matrix is created on the basis of two criteria: the maturity of the product in the industry sector, divided into 5 phases and the competitive position of companies in that industry sector into 3 phases. This circles are placed in the appropriate cell, where represent different areas of activity in the company, and the size of the circle is proportional to size of the sector. Sometimes segments could be added to the circle, which reflect the market share of company in the sector.
Hofer Matrix Template
Here is a Hofer Matrix template created with Visual Paradigm's online strategic analysis tool. You can customize this template by modifying the text, color and font, and use it in your presentations and reports.
