GE MATRIX

Submitted By:- Submitted

Snehalata Magar To :Priya
Ramachandran
Pavithra Powar
Avinash Kumar
BCG Matrix
 BCG MATRIX
 It is developed by Boston consultancy group in 1972.It is also
known as growth share matrix.
 STAR-Needs a good deal of investment support as it operates in a
high growth market. They are at a peak of product life cycle, and
star indicates a great potential for future.
 Mark-in this the future is uncertain, they are in high risk zone
 Cash cow-Cows are generators of resources, it brings a lot of cash.
Does not require investment as it is in low growth market.
 Dog-They are in low growth market and low market share. They
actually blocks capital of the company.
Advantages Of BCG
 Model is simple and easy to understand.
 BCG is applicable to large companies that seek
volume and experience effects.
 BCG Model is helpful for managers to evaluate
balance in the firms current portfolio.
Limitations
 High market share is not the only success
factor
 Market growth is not the only indicator for
attractiveness of a market
 Sometimes Dogs can earn even more cash
as Cash Cows
 Firms with small market share can be
highly profitable.
General Electric (GE) Matrix
 ABOUT GE MATRIX

 Developed by McKinsey &

Company in 1970’s.Also
known as Spotlight Matrix.
 GE is a model to perform business
portfolio analysis on the SBU’s.
 GE is rated in terms of ‘Market
Attractiveness & Business
Strength’
 It is an Enlarged & Sophisticated
version of BCG.
STRATEGIC PLANNING

 It is the
management task
concerned with the
growth and future of
business enterprise.

 It provides the route

map for the firm and
helps to take
decision in the future
with a greater
 GE Nine-cell Planning Grid:-
Business Strength
Strong Medium Weak
Market Attractiveness

High
Medium
Low
GE nine-cell Planning
Grid:-
 Zone
Strategic Signal
Green Invest/Expa
nd

Yellow Select/Earn

Red Harvest/Divest
GE Nine-cell Planning Grid:-
 Invest/ Expand: In this Zone there is opportunity to
Grow through further Investment & Expansion. This zone is
characterized by high business strength & high industry
attractiveness which is a Ideal situation for growth. How ever
this situation does not remain for a long time.
 Example: Initially IT industry most attractive but later on it was
facing competition from all sorts of place.
 Select/Earn : This zone presents a mix situation in which
growth possibility is low. However its presents a opportunities
for selective earning.
 Harvest/Dives: In the case of red-cell organization has
to stop. In this case Harvesting or Divesting strategies suitable.
Harvesting means withdraw from a business but withdrawal is
not immediate. Initially focus is on cost-cutting i.e In R&D and
advertising, the objective is to earn short term profit.
Market Attractiveness
 Annual market growth
rate
 Overall market size
 Historical profit margin
 Current size of market
 Market structure
 Market rivalry
 Demand variability
 Global opportunities
Business Strength
Current market share

Brand image

Production capacity

Corporate image

Profit margins relative to competitors

R & D performance

Promotional effectiveness

Study of TATA
 TATA
• IT (Information Technology) : TCS
• Consumer Durable : Automobiles,
Titan etc.
•Textiles : Tata Fabrics, West Sides etc
GE Matrix For TATA

Strong Weak
Business Strengths
High
IT Consumer
Durables
Attractiveness
Market

Low
Textiles
 BCG & GE Matrix
Relative Position
Business Strength
(Market Share)

Market Attractiveness
Market Growth
 BCG v/s GE

BCG GE
Market Growth
Market Attractiveness

Market share
Market strength
4 cell 9 cell
Multi Products
Multi Business Units

Primary tools
Secondary tools
THANKING YOU