GE Nine Cell Matrix

Presented by:
MADHURI
BHAWANA PATIAL
PRABHJEET KAUR
POOJA BHANDARI
GURJEET SINGH

 The GE Multi Factoral was first developed by

Mckinsey for General Electric in the 1970s.
G.E. multi factoral analysis is a technique used in
brand marketing and product management to help
a company decide what product(s) to add to its product
portfolio and which opportunities in the market they
should continue to invest in and which ones to
sell off.
The G.E matrix helps a strategic business unit evaluate
its overall strength

 The objective of the analysis is to position each SBU

on the chart depending on the SBU's Strength and the
Attractiveness of the Industry Sector or Market on
which it is focused. Market Attractiveness plotted on
the Y-axis and Business Strength on the X-axis
Each axis is divided into Low, Medium and High
giving the nine-cell matrix as depicted below.

INDUSTRY ATTRACTIVENESS
The attractiveness of a market is demonstrated by how
beneficial it is for a company to enter and compete within
this
market.
Market Size
Market Growth Rate
Demand variability
Industry Profitability
Competitive Rivalry
Global Opportunities
Entry and exit barriers
Capital requirement
Macro environmental Factors (PEST)

SBU STRENGTH
Market Share
Distribution Channel Access
Financial Resources
R&D Capability
Brand equity
Production Capacity
Knowledge of customer and market
Caliber of management
Relative cost position

STRATEGIES OF GROW

Business units that fall under grow attract high investment. Firms may go
for product differentiation or Cost leadership. Huge cash is generated in
this phase. Market leaders exist in this phase.
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

STRATEGIES OF HOLD
Business units that fall under hold phase attract moderate investment. Market
segmentation, Market penetration, imitation strategies are adopted in this
phase. Followers exist in this phase.
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 OF HARVEST
Business units that fall under this phase are unattractive. Low priority is given in
these business units. Strategies like divestment, Diversification, mergers are
adopted in this phase.
Limited Expansion for Harvest
Look for ways to expand without high risk
Manage for Earnings
Protect position in profitable segment
Upgrade product line
Minimize investment
Harvest
Sell at time that will maximize cash value
Cut fixed costs and avoid investment meanwhile

ADVANTAGES OF GE MATRIX
Raises awareness between managers about the
performance of their products in the market and
aids in developing strategies to get maximum
returns from the resources available.
Helps extract information about a business unit's
strengths and weaknesses and to devise strategies
to accelerate and improve performance.
Aids the business in growing and in providing
information about potential market opportunities.
It is more complex in comparison to the BCG
matrix

DISADVANTAGES OF GE
MATRIX
There is no set rule to 'weight' factors and this
process may be subjective across different
business unit's. For example, the weight given to
a factor by one business may be different to the
weight/importance given to it by another.
The formulation of a G.E. matrix is very
expensive and time consuming.
Investment strategies are often not implemented
in an accurate and proper manner.
The dynamics among SBU's themselves are not
taken into account.

Step-by-step plan to
set up a GE McKinsey
matrix
Define the Product Market Combinations (PMCs). Who are the
customers of an organization and what are its products and/or
services?
Define the aspects that determine the attractiveness of the market.
Certain weight factors can be assigned to certain aspects. Market
attractiveness is a critical factor that has to be considered
carefully.
Define the aspects that determine the competitive power of the
organizations.
Assign scores to the different PMCs. Have this done by several
people within and outside of the organization. This will ensure a
fair representation.

 Calculate the final scores. By comparing the final

scores for market attractiveness and competitive
power with the maximum score, it is possible to
determine their position on the matrix.
Draw the matrix and plot market attractiveness
on the x-axis and competitive power on the y-axis.
The higher the volume in turnover of a PMC, the
larger the circle.
Evaluate and discuss. The matrix can serve as the
basis for a discussion about strategic decisions.

GE PORTFOLIO EXAMPLE
Market Factor

Weight

Rating (1- 5)

Value

Size

.33

1.65

Growth

.33

.99

Profit Margins

.34

.68
3.32

Market Share

.33

.33

Product Quality

.33

1.65

Distribution Net

.34

.68
2.66

Business

EXAMPLE OF GE NINE CELL MATRIX

About Maruti Udyog

Founded in 1981
Products are Maruti 800, Omni, Alto,SX4,Swift
Desire,Swift,A-star, Gypsy,Wagon R,Ritz,others.
Vision The Leader in the Indian Automobile
Industry, Creating Customer Delight and
Shareholders Wealth;a Pride of India
Core Values : Our Core Values drive us in every endeavour Customer Obession
fast, Flexible & first mover
Innovation & creativity
Networking & Partnership
Openess & Learning

APPLE INC.

APPLE OVERVIEW
Apple Inc. is a large technology company with
several business units operating in different
markets, including desktop computers, laptops,
tablet computers (iPads), portable music players
(iPods), smartphones (iPhones) and software to
support these products.
A competitor wishing to gain competitive
intelligence on the activities of Apple Inc. could do
so by placing its business units into a GE/McKinsey
Matrix. By analyzing this matrix, it could determine
which business units Apple is likely to invest in
heavily, develop selectively, or divest.

THANK YOU