What is the GE McKinsey nine cell matrix?
The GE matrix was developed by Mckinsey and Company consultancy group in the 1970s. The nine cell grid measures business unit strength against industry attractiveness and this is the key difference. Whereas BCG is limited to products, business units can be products, whole product lines, a service or even a brand.
How is the GE McKinsey matrix similar to and different from the BCG matrix?
The GE matrix generalizes the axes as “Industry Attractiveness” and “Business Unit Strength” whereas the BCG matrix uses the market growth rate as a proxy for industry attractiveness and relative market share as a proxy for the strength of the business unit.
Which tool is most associated with the GE McKinsey strategy matrix?
BCG Matrix (also known as the Boston Consulting Group analysis, the Growth-Share matrix, the Boston Box or Product Portfolio matrix) is a tool used in corporate strategy to analyse business units or product lines based on two variables: relative market share and the market growth rate.
How is GE matrix better than BCG matrix?
BCG Matrix. The main advantage of the GE Matrix as a strategy tool is, of course, that it tries to answer the question of where scarce resources should be invested. It is more refined than the BCG Matrix as it replaces a single factor, “market growth,” with many factors under “market attractiveness.”
What is industry attractiveness score?
Industry attractiveness indicates how hard or easy it will be for a company to compete in the market and earn profits. The more profitable the industry is the more attractive it becomes.
What is GE McKinsey matrix used for?
The GE McKinsey matrix is a nine-box matrix which is used as a strategy tool. It helps multi-business corporations evaluate business portfolios and prioritize investments among different business units in a systematic manner. This technique is used in brand marketing and product management.
What is the GE McKinsey matrix used for?
The GE-McKinsey Nine-box matrix functions by providing strategic options on how to get maximum yield from each small business unit, it also helps to evaluate all types of business portfolios and provides the best strategic implications on the business.
How do I get a GE McKinsey Matrix?
HOW TO APPLY THE MATRIX TO YOUR BUSINESS
- Step 1: Determine Industry Attractiveness of Different Business Units.
- Step 2: Determine the Competitive Strength of each Business Unit.
- Step 3: Plot the business units on a matrix.
- Step 4: Analysis of Information.
- Step 5: Identify future direction of each unit.
How many cells are in a GE McKinsey Matrix?
The GE matrix was developed by Mckinsey and Company consultancy group in the 1970s. The nine cell grid measures business unit strength against industry attractiveness and this is the key difference.
What does Star symbolize in BCG matrix?
The vertical axis of the BCG Matrix represents the growth rate of a product and its potential to grow in a particular market. Stars: Products with high market growth and a high market share. Dogs: Products with low market growth and a low market share. Cash cows: Products with low market growth but a high market share.
What increases industry attractiveness?
Industry attractiveness is measured by external factors such as: market size, market growth rate, cyclicality, competitive structure, barriers to entry, industry profitability, technology, inflation, regulation, manpower, availability, social issues, environmental is sues, political issues, and legal issues.
How can you enhance firm attractiveness and industry attractiveness?
There are definitely steps you can take to make your business more attractive for investment and/or acquisition:
- Increase Recurring Services.
- Improve Route Efficiency.
- Deliver Exceptional Customer Service.
- Cultivate Positive Culture.
- Streamline Communications.
- Demonstrate Synergies Where You Can Reduce Costs.
How is the GE / McKinsey mulitfactor portfolio matrix developed?
The GE/McKinsey Mulitfactor Portfolio matrix was developed as a more sophisticated version of the BCG Growth-Share matrix. In a similar manner to the BCG matrix, the GE/McKinsey matrix plots “Market Attractiveness” against “Business Strength” (i.e. the competitiveness of the business unit or product in the market).
What is the GE / McKinsey Nine box matrix?
The GE/McKinsey Matrix or GE-McKinsey nine-box matrix is a business portfolio analysis that provides a structured way to evaluate business units on two key dimensions: the attractiveness of the market involved and the strength of the firm’s position in that market.
How is industry attractiveness determined in GE / McKinsey matrix?
Industry Attractiveness The vertical axis of the GE / McKinsey matrix is industry attractiveness, which is determined by factors such as the following: Each factor is assigned a weighting that is appropriate for the industry. The industry attractiveness then is calculated as follows:
When to harvest in the GE McKinsey matrix?
Harvest – If the business unit or market has become unattractive, than you either sell or liquidate the business or you can hold it for any residual value that it has. This strategy is used in the GE McKinsey matrix when the business unit strength is weak and the market has lost its attractiveness.