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| GE matrix / McKinsey matrix
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| Introduction |
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The GE matrix / McKinsey matrix is a model to perform a business portfolio analysis on the Strategic Business Units of a corporation. It has many key uses like
Developed by McKinsey & Company in 1970’s.
GE is a model to perform business portfolio analysis on the SBU’s.
GE is rated in terms of ‘Market Attractiveness & Business Strength’
It is an Enlarged & Sophisticated version of BCG.
Analyze its current business portfolio and decide which SBU's should receive more or less investment, and
Develop growth strategies for adding new products and businesses to the portfolio
Decide which businesses or products should no longer be retained.
Limitations
Subjective measurements across SBUs
Process also highly subjective
From the selection and weighting of factors to the subsequent development of both a firm’s position and the market attractiveness
Businesses may have been evaluated with respect to different criteria
Sensitive to how a product market is defined
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| Market Attractiveness |
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Annual market growth rate
Overall market size
Historical profit margin
Current size of market
Market structure
Market rivalry
Demand variability
Global opportunities
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| Business Strength |
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Current market share
Brand image
Brand equity
Production capacity
Corporate image
Profit margins relative to competitors
R & D performance
Managerial personal
Promotional effectiveness
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