Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Presented By
Kartik Sharma(95)
Harshvardan Yadav(102)
Introduction
In 1968, then-CEO of GE, Fred Borch, asked McKinsey and Co. for an
examination of GEs corporate structure. McKinseys examination
revealed that GEs structure was inadequate, and they argued that
the
firm should be organized on more strategic lines, with greater concern
for external conditions than internal controls. The company was
divided into strategic business units, or SBUs.
In 1971, GE asked McKinsey to evaluate strategic plans drawn up by
the SBUs. According to GE, the BCG Growth Matrix, with only two
performance measures, was insufficient for the companys needs.
From this request, the GE/McKinsey 9-block matrix, a system using a
dozen measures to screen for industry attractiveness and another
dozen to screen for competitive position, was developed
Appliances
Aircraft Engines
Capital Services
Industrial Systems
Lighting
Medical Systems
NBC Television Network
Plastics
Power Systems
Transportation Systems
GE Matrix
9-Cell Grid
Low
Medium
High
Market Attractiveness
Business Strength
Strong
Medium
Weak
Market Attractiveness
Business Strength
Industry Attractiveness
High
High
Medium
Low
Protect
Position
Build
selectively
Protect &
refocus
Medium
Low
Invest to
Build
Build
selectively
Selectively
manage for
earnings
Limited
expansion
or harvest
Manage
for earnings
Divest
Invest/Grow
Selectivity
/earnings
Harvest
/Divest
Strategies-Segment 1
Protect Position
Invest to grow
Effort on maintaining strength
Invest to Build
Challenge for leadership
Build selectively on strength
Build Selectively
Invest in most attractive segment
Build up ability to counter competition
Emphasize profitability by raising productivity
Strategies-Segment 2
Protect & Refocus
Manage for current earning
Defend strength
Selectivity for Earning
Protect existing program
Investments in profitable segments
Build Selectively
Specialize around limited strength
Seek ways to overcome weaknesses
Withdraw if indication of sustainable
growth are lacking
Strategies-Segment 3
Limited Expansion for Harvest
Look for ways to expand
withoutfor
high
risk
Manage
Earnings
Protect position in profitable segment
Upgrade product line
Minimize investment
Harvest / Divest
Sell at time that will maximize cash value
Cut fixed costs and avoid investment
meanwhile
Case Study-LVMH
(Mot Hennessy - Louis Vuitton)
A world leader in luxury, LVMH possesses a unique portfolio of over
60 prestigious brands. The Group is active in five different sectors:
Wines & Spirits
Fashion & Leather Goods
Perfumes & Cosmetics
Watches & Jewelry
Selective retailing
Thanks to its brand development strategy, and the expansion of
its international retail network (more than 2,300 stores worldwide)
.LVMH has had a strong growth dynamic since its creation in 1987.
Today, LVMH has 77,000 employees.
References
www.Mydashboard.com
www.ValueBasedManagement.com
www.wikipedia.org
www.QuickMBA.com
www.redpointcoaching.com
www.lvmh.com