Thanks to visit codestin.com
Credit goes to www.scribd.com

Scribd
Upload
509 views12 pages

GE Matrix

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.

Uploaded by

Arun Chidambaram
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
509 views12 pages

GE Matrix

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.

Uploaded by

Arun Chidambaram
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 12

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

You might also like