Capability-Based Investment Matrix

The Capability-Based Investment Matrix is a tool used to evaluate the potential of investments based on the capabilities they offer. It is used to prioritize investments and allocate resources.

At a very high level, the Capability-Based Investment Matrix is used in the context of business, finance.

Capability-Based Investment Matrix quadrant descriptions, including examples
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What is the Capability-Based Investment Matrix?

A visual explanation is shown in the image above. The Capability-Based Investment Matrix can be described as a matrix with the following quadrants:

  1. High Capability, High Investment: Investments that offer high capability but require high investment, such as a new software system.
  2. High Capability, Low Investment: Investments that offer high capability but require low investment, such as an online course.
  3. Low Capability, High Investment: Investments that offer low capability but require high investment, such as a new office building.
  4. Low Capability, Low Investment: Investments that offer low capability but require low investment, such as a new website.

What is the purpose of the Capability-Based Investment Matrix?

The Capability-Based Investment Matrix is a tool used to evaluate the potential of investments based on the capabilities they offer. It is used to prioritize investments and allocate resources. This matrix is used to identify the best investments to pursue, based on their potential to increase the organization's capabilities. It is a 2x2 matrix, with four quadrants representing different levels of capability and investment.

The top left quadrant represents investments that offer high capability but require high investment. These investments are usually pursued when the organization has the resources to do so. The top right quadrant represents investments that offer high capability but require low investment. These investments are usually pursued when the organization is looking for quick wins. The bottom left quadrant represents investments that offer low capability but require high investment. These investments are usually avoided, as they are unlikely to offer a good return on investment. The bottom right quadrant represents investments that offer low capability but require low investment. These investments are usually pursued when the organization is looking for low-risk opportunities.


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What templates are related to Capability-Based Investment Matrix?

The following templates can also be categorized as business, finance and are therefore related to Capability-Based Investment Matrix: Effort Impact Matrix, Gap Analysis Matrix, Growth Share Matrix, Kraljic Matrix, Outsourcing Matrix, Quadrant Analysis, Risk Analysis Matrix, Risk Value Matrix. You can browse them using the menu above.

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