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GE Matrix

The document provides an overview of the GE Matrix, which is a portfolio analysis tool developed by McKinsey & Company in the 1970s. The GE Matrix assesses business units based on their market attractiveness and business strength. It divides analysis into nine cells of three categories based on these factors: invest/expand, select/earn, and harvest/divest. The GE Matrix provides a more sophisticated analysis than the BCG Matrix by evaluating multiple business units across various market attractiveness and business strength levels.

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Sriparna Chatterjee
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4K views20 pages

GE Matrix

The document provides an overview of the GE Matrix, which is a portfolio analysis tool developed by McKinsey & Company in the 1970s. The GE Matrix assesses business units based on their market attractiveness and business strength. It divides analysis into nine cells of three categories based on these factors: invest/expand, select/earn, and harvest/divest. The GE Matrix provides a more sophisticated analysis than the BCG Matrix by evaluating multiple business units across various market attractiveness and business strength levels.

Uploaded by

Sriparna Chatterjee
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPT, PDF, TXT or read online on Scribd
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GE MATRIX

Submitted By:- Submitted


Snehalata Magar To :Priya
Ramachandran
Pavithra Powar
Avinash Kumar
BCG Matrix
BCG MATRIX
 It is developed by Boston consultancy group in 1972.It is also
known as growth share matrix.
 STAR-Needs a good deal of investment support as it operates in a
high growth market. They are at a peak of product life cycle, and
star indicates a great potential for future.
 Mark-in this the future is uncertain, they are in high risk zone
 Cash cow-Cows are generators of resources, it brings a lot of cash.
Does not require investment as it is in low growth market.
 Dog-They are in low growth market and low market share. They
actually blocks capital of the company.
Advantages Of BCG
 Model is simple and easy to understand.
 BCG is applicable to large companies that seek
volume and experience effects.
 BCG Model is helpful for managers to evaluate
balance in the firms current portfolio.
Limitations
 High market share is not the only success
factor
 Market growth is not the only indicator for
attractiveness of a market
 Sometimes Dogs can earn even more cash
as Cash Cows
 Firms with small market share can be
highly profitable.
General Electric (GE) Matrix
ABOUT GE MATRIX

 Developed by McKinsey &


Company in 1970’s.Also
known as Spotlight Matrix.
 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.
STRATEGIC PLANNING

 It is the
management task
concerned with the
growth and future of
business enterprise.

 It provides the route


map for the firm and
helps to take
decision in the future
with a greater
GE Nine-cell Planning Grid:-
Business Strength
Strong Medium Weak
Market Attractiveness

High
Medium
Low
GE nine-cell Planning
Grid:-
 Zone
Strategic Signal
Green Invest/Expa
nd

Yellow Select/Earn

Red Harvest/Divest
GE Nine-cell Planning Grid:-
 Invest/ Expand: In this Zone there is opportunity to
Grow through further Investment & Expansion. This zone is
characterized by high business strength & high industry
attractiveness which is a Ideal situation for growth. How ever
this situation does not remain for a long time.
 Example: Initially IT industry most attractive but later on it was
facing competition from all sorts of place.
 Select/Earn : This zone presents a mix situation in which
growth possibility is low. However its presents a opportunities
for selective earning.
 Harvest/Dives: In the case of red-cell organization has
to stop. In this case Harvesting or Divesting strategies suitable.
Harvesting means withdraw from a business but withdrawal is
not immediate. Initially focus is on cost-cutting i.e In R&D and
advertising, the objective is to earn short term profit.
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

Study of TATA
 TATA
• IT (Information Technology) : TCS
• Consumer Durable : Automobiles,
Titan etc.
•Textiles : Tata Fabrics, West Sides etc
GE Matrix For TATA

Strong Weak
Business Strengths
High
IT Consumer
Durables
Attractiveness
Market

Low
Textiles
BCG & GE Matrix
Relative Position
Business Strength
(Market Share)

Market Attractiveness
Market Growth
BCG v/s GE

BCG GE
Market Growth
Market Attractiveness

Market share
Market strength
4 cell 9 cell
Multi Products
Multi Business Units

Primary tools
Secondary tools
THANKING YOU

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