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    GE Matrix

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    Arun Chidambaram
    The GE Matrix is a strategic planning tool used to evaluate a company's business units based on two factors: industry attractiveness and the company's strength in that business. Industry attractiveness depends on factors like growth, size, and profitability. Company strength is based on market share, growth rate, brand image and other competitive factors. The GE Matrix was developed by McKinsey for General Electric in the 1970s and helps companies decide where to invest or add new products/markets. It is an extension of the BCG Matrix but is more sophisticated and provides more detailed information for management.

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    GE Matrix

    Uploaded by

    Arun Chidambaram
    330 views12 pages
    The GE Matrix is a strategic planning tool used to evaluate a company's business units based on two factors: industry attractiveness and the company's strength in that business. Industry attractiveness depends on factors like growth, size, and profitability. Company strength is based on market share, growth rate, brand image and other competitive factors. The GE Matrix was developed by McKinsey for General Electric in the 1970s and helps companies decide where to invest or add new products/markets. It is an extension of the BCG Matrix but is more sophisticated and provides more detailed information for management.

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    The GE Matrix is a strategic planning tool used to evaluate a company's business units based on two factors: industry attractiveness and the company's strength in that business. Industry attractiveness depends on factors like growth, size, and profitability. Company strength is based on market share, growth rate, brand image and other competitive factors. The GE Matrix was developed by McKinsey for General Electric in the 1970s and helps companies decide where to invest or add new products/markets. It is an extension of the BCG Matrix but is more sophisticated and provides more detailed information for management.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    330 views12 pages

    GE Matrix

    Uploaded by

    Arun Chidambaram
    The GE Matrix is a strategic planning tool used to evaluate a company's business units based on two factors: industry attractiveness and the company's strength in that business. Industry attractiveness depends on factors like growth, size, and profitability. Company strength is based on market share, growth rate, brand image and other competitive factors. The GE Matrix was developed by McKinsey for General Electric in the 1970s and helps companies decide where to invest or add new products/markets. It is an extension of the BCG Matrix but is more sophisticated and provides more detailed information for management.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
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    The document talks about GE matrix which is a strategic planning tool that rates businesses on the basis of industry attractiveness and company's business strength.

    The two main parameters used in GE matrix are industry attractiveness and company's business strength.

    The factors considered in determining industry attractiveness are industry potential, current size, growth rate, industry structure and profitability.

    GE MATRIX

    GE MATRIX? USES OF GE MATRIX. HOW ATTRACTIVE IN THE INDUSTRY. FACTORS UNDERLYING THE PARAMETERS. DIAGRAM OF GE MATRIX. BCG AND GE MODEL.

    Bhuvanesh.K-Ist MBA

    GE Matrix?
    The multi factor portfolio planning matrix propagated by General Electric (GE) holds that a company can appropriately rate its different businesses for the purpose of strategic planning, on the basis of two main parameters.
    Industry attractiveness. Companys business strength.

    USES OF GE MATRIX
    Alternative technique used in brand

    marketing and product management.


    Help a company decide to what product to add and

    which market opportunities are worthy of continued investment.


    Also known as the 'Directional Policy Matrix,' the GE

    multi-factor model was first developed by Mckinsey for General Electric in the 1970s.

    HOW ATTRACTIVE IN THE INDUSTRY


    Every firm desires to stay in the most attractive industries

    and excel through its distinctive strengths and if not the business is rated as the least important one.
    The other businesses will occupy a position somewhere

    between the two extremes this is the basic approach of the GE model.

    FACTORS UNDERLYING THE PARAMETERS


    Industry attractiveness is the product of several factors

    such as industry potential, the current size of the industry, the rate of growth of the industry, the industry structure and the profitability of the industry.
    Companys business strength is the product of several

    factors such as companys current market share, growth rate, differentiation strength, brand image, corporate image, etc.

    FACTORS UNDERLYING THE PARAMETERS(cont)


    Each firm will have to identify the factors specific to its

    industry and its competitive position.


    It has to also assign due weightages to each of the factors

    and find out the weighted measures in respect of the two parameters, viz., market attractiveness and firms business strength.

    STRENGTHS AND WEAKNESSES


    The GE/McKinsey Matrix, as an extension of the BCG framework, shares the fore mentioned advantages of the BCG model. Though the GE/McKinsey Matrix is more sophisticated than the BCG matrix and can provide higher value information for the executive management, it has several flaws and limitations. No proven relationship between market attractiveness and business position. The approach requires extensive data gathering.

    STRENGTHS AND WEAKNESSES(cont) ` The relationships between different


    units are not taken into account. The core-competencies that lead to value creation are not taken into consideration. Scoring is personal and subjective (risk of bias) There is no hard and fast rule on how to weight elements. The GE/McKinsey Matrix offers a broad strategy and does not indicate how best to implement it.

    DIFFERENCE BETWEEN BCG AND GE MODEL


    BCG model goes by
    GE model goes by industry

    industry growth and companys business strength. BCG is a growth share matrix

    attractiveness and companys business strength. GE model is an enlarged version of the BCG model.

    DIAGRAM OF GE MATRIX

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