Final answer:
The matrix is designed to help companies make informed portfolio management decisions, directing investments towards areas with the highest potential for returns and growth. Companies have several options for funding their investment projects, including attracting early-stage investors, reinvesting profits, taking loans, and selling stock. As firms grow and show promise of profits, they can garner financial support from broader investor bases.
Step-by-step explanation:
The purpose of the matrix in portfolio management and decision-making is to support companies in optimizing their investments for maximum returns and fostering future growth. By utilizing such matrices, marketers and business owners can strategically allocate their financial resources to different projects or segments of their business depending on potential return on investment and future growth opportunities. This entails making informed decisions to invest in certain assets or sectors, such as the purchase of long-lasting machinery, the construction of new plants, or the initiation of research and development that can ensure prosperity in the long-run.
Firms generally acquire the financial capital needed for such projects by attracting early-stage investors, reinvesting profits, securing loans or issuing bonds, and selling stock. As a firm matures, and its strategies hint at future profitability, it can attract additional funds from external investors like bondholders and shareholders, who rely on widely available information about the company's financial status rather than personal relationships with the managers.