It indicates business strength or in other words competitive position, which is again a weighted composite rating based on seven factors as listed below: The nine cells of the GE matrix are grouped on the basis of low to high industry attractiveness, and weak to strong business strength. Three zones of three cells each are made, indicating different combinations represented by green, yellow and red colors. Businesses in the green zone attract major investment.
Companies should invest into the business units that fall into these boxes as they promise the highest returns in the future.
It is essential to provide as much resources as possible for BUs so there would be no constraints for them to grow.
The general rule should be to invest in business units which operate in huge markets and there are not many dominant players in the market, so the investments would help to easily win larger market share.
What should companies do with these business units?
This means that the companies should invest into these business units just enough to keep them operating and collect all the cash generated by it. Second, the business units that only make losses should be divested. Further analysis may reveal that investments into some of the business units can considerably improve their competitive positions or that the industry may experience major growth in the future.
This affects the decisions we make about our investments into one or another business unit. The answer is no and the matrix should take that into consideration. How to do that?
Well, the company should consult with the industry analysts to determine whether the industry attractiveness will grow, stay the same or decrease in the future. You should also discuss with your managers whether your business unit competitive strength will likely increase or decrease in the near future.
When all the information is collected you should include it to your existing matrix, by adding the arrows to the circles. The arrows should point to the future position of a business unit. The following table shows how industry attractiveness and business unit competitive strength will change in 2 years.GE / McKinsey Matrix.
In consulting engagements with General Electric in the 's, McKinsey & Company developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic business units (SBU).
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. GE NINE CELL MATRIX Another popular “Corporate Portfolio Analysis” technique is the result of pioneering effort of General Electric Company along with McKinsey Consultants which is known as the GE NINE CELL MATRIX.
GE nine-box matrix is a strategy tool that offers a systematic approach for the multi business enterprises to prioritize their .
In this interactive presentation--one in a series of multimedia frameworks--McKinsey alumnus Kevin Coyne describes the GE–McKinsey nine-box matrix, a framework that offers a systematic approach for the multibusiness corporation to prioritize its investments among its business units.
Ge9 final ppt 1. GE Nine Cell Matrix 2. GE Nine Cell Matrix The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix usedto perform business portfolio analysis as a step in the strategicplanning process.
The GE/McKinsey Matrix identifies the optimum businessportfolio as one that fits perfectly to the companys strengthsand helps to explore the most attractive industry sectors ormarkets. The objectiv. Mar 18, · For your free course notes to accompany this video visit timberdesignmag.com