GE 9-CELL

 McKinsey matrix / GE matrix

 portfolio analysis model

GE McKinsey Matrix
 TheGE matrix / McKinsey matrix is a
model to perform a business
portfolio analysis on the Strategic
Business Units of a corporation.
portfolio analysis
 Analyze its current business portfolio and
decide which SBU's should receive more or
less investment


 Develop growth strategies for adding new

products and businesses to the portfolio


 Decide which businesses or products

should no longer be retained.
GE MATRIX Vs BCG MATRIX
 Market (Industry) attractiveness
 Competitive strength.
 GE / McKinsey Matrix - 3*3 grid
 BCG Matrix - 2*2
 


VERTICAL AXIS - industry attractiveness

Market growth rate

Market size

Demand variability

Industry profitability

Industry rivalry

Global opportunities

Macro environmental factors

HORIZONTAL AXIS- strength of the business unit

Market share
Growth in market share

Brand equity

Distribution channel access

Production capacity

Profit margins relative to competitors


 Industry attractiveness and business unit strength are
calculated by first identifying criteria for each,
determining the value of each parameter in the criteria,
and multiplying that value by a weighting factor. The
result is a quantitative measure of industry attractiveness
and the business unit's relative performance in that
industry
 Industry attractiveness =
 factor value1 x factor weighting1
 + factor value2 x factor weighting2+…

 Each business unit can be portrayed as a circle plotted on
the matrix, with the information conveyed as follows:
 Market size is represented by the size of the circle.
 Market share is shown by using the circle as a pie chart.
 The expected future position of the circle is portrayed by
means of an arrow.

 LIMITATIONS OF GE- MATRIX

 Valuation of the realization of the various factors

 Aggregation of the indicators is difficult
 Core competencies are not represented
 Interactions between Strategic Business Units are not
considered
