GE Nine Cell Matrix

GE Nine Cell Matrix

Industry Business Unit Strength
Attractiveness

Strong Average Weak

High Grow Grow Hold

Medium Grow Hold Harvest

Low Hold Harvest Harvest

 GE Nine Cell Matrix
The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix used
to perform business portfolio analysis as a step in the strategic
planning process.

The GE/McKinsey Matrix identifies the optimum business

portfolio as one that fits perfectly to the company's strengths
and helps to explore the most attractive industry sectors or
markets.

The objective of the analysis is to position each SBU on the

chart depending on the SBU's Strength and the Attractiveness
of the Industry Sector or Market on which it is focused. Each
axis is divided into Low, Medium and High, giving the nine-
cell matrix as depicted below.
 GE Nine Cell Matrix
 Different factors can be used to define Industry Attractiveness. Like:-
Market Size, Market Growth Rate, Demand variability, Industry
Profitability, Competitive Rivalry, Global Opportunities, Entry and exit
barriers, Capital requirement, Macro environmental Factors (PEST)

 Different factors can also be used to define SBU Strength. Like:-

Market Share, Distribution Channel Access, Financial Resources, R&D
Capability, Brand equity, Production Capacity, Knowledge of customer
and market, Caliber of management. Relative cost position

 The factors and their relative weightings are selected. The rating values
for each factor are entered for each SBU and Industry.
 GE Nine Cell Matrix
Industry Business Unit Strength
Attractiveness

Strong Average Weak

High Grow Grow Hold

Medium Grow Hold Harvest

Low Hold Harvest Harvest

 GE Nine Cell Matrix
 Grow – Business units that fall under grow attract high
investment. Firms may go for product differentiation or Cost
leadership. Huge cash is generated in this phase. Market leaders
exist in this phase.

 Hold – Business units that fall under hold phase attract moderate
investment. Market segmentation, Market penetration, imitation
strategies are adopted in this phase. Followers exist in this phase.

 Harvest - Business units that fall under this phase are

unattractive. Low priority is given in these business units.
Strategies like divestment, Diversification, mergers are adopted in
this phase.
 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
 GE Nine Cell Matrix
Strength
a) It allows intermediate ratings between high and low and between
strong and week.

b) It helps in channeling the corporate resources to business and

achieving competitive advantage and superior performance.

c) It helps in better strategic decision making and better understanding

of business scope.

Weakness
a)It tends to obscure business that are become to winners because their
industries are entering at exit stage.

b)Assessment of business in terms of two factors is not fair.

EXAMPLE OF GE NINE CELL MATRIX
 About Maruti Udyog
• Founded in 1981
• Products are Maruti 800, Omni, Alto,SX4,Swift
Desire,Swift,A-star, Gypsy,Wagon R,Ritz,others.
• Vision – “The Leader in the Indian Automobile
Industry, Creating Customer Delight and
Shareholder’s Wealth;a Pride of India”
• Core Values : Our Core Values drive us in every
endeavour-
 Customer Obession,
 fast, Flexible & first mover,
 Innovation & creativity
 Networking & Partnership
 Openess & Learning
THANK
YOU