Performance-Value Matrix

The Performance-Value Matrix is a strategic business tool used to evaluate and categorize products, services, or business units based on their performance and value. It helps organizations identify areas for improvement, investment, or divestment by plotting entities on a 2x2 grid with axes representing performance and value.

At a very high level, the Performance-Value Matrix is used in the context of business, strategy, management.

Performance-Value Matrix quadrant descriptions, including examples
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What is the Performance-Value Matrix?

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

  1. Underperformers: Entities with high value but low performance, e.g., a popular product with quality issues.
  2. Star Performers: Entities with high value and high performance, e.g., a top-selling, high-quality product.
  3. Question Marks: Entities with low value and low performance, e.g., a low-selling, low-quality product.
  4. Potential Stars: Entities with low value but high performance, e.g., a high-quality product with low sales.

What is the purpose of the Performance-Value Matrix?

The Performance-Value Matrix is a 2x2 grid used by businesses to assess and categorize their products, services, or business units based on two key dimensions: performance and value. The horizontal axis represents performance, which can be measured by factors such as efficiency, quality, or customer satisfaction. The vertical axis represents value, which can be quantified by revenue generation, market share, or strategic importance.

Each quadrant in the matrix provides insights into different strategic actions:

  • High Performance, High Value (Star Performers): These are the top-performing entities that also provide high value to the organization. They are often prioritized for further investment and development.
  • High Performance, Low Value (Potential Stars): These entities perform well but do not currently provide significant value. They may require strategic adjustments to enhance their value proposition.
  • Low Performance, High Value (Underperformers): These are valuable entities that are not performing up to expectations. They may need operational improvements or resource reallocation to boost performance.
  • Low Performance, Low Value (Question Marks): These entities neither perform well nor provide significant value. They are candidates for divestment or discontinuation.

Use cases for the Performance-Value Matrix include portfolio management, strategic planning, and resource allocation. By visualizing the performance and value of different business components, organizations can make informed decisions to optimize their operations and achieve strategic goals.

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What templates are related to Performance-Value Matrix?

The following templates can also be categorized as business, strategy, management and are therefore related to Performance-Value Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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