Strategy Classics: GE-McKinsey Matrix
Originally published: 22/09/2020 07:22
Last version published: 22/09/2020 09:12
Publication number: ELQ-70595-2
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Strategy Classics: GE-McKinsey Matrix

GE-McKinsey Matrix is a classic strategy framework developed by McKinsey used for Portfolio Management.

GE-McKinsey Matrix was outlined by McKinsey & Co. in the 1970s, when they were commissioned by General Electric (GE) to develop a Portfolio Management model. The matrix serves as a multi-factorial analysis technique that is useful for the senior leadership in determining the product(s)--that should be essentially added to the product portfolio--and the opportunities to invest in the market.

The GE-McKinsey Matrix is, basically, an adaptation of the BCG analysis—which GE was using at that time. However, it is a more comprehensive framework to decide whether to invest or divest in a business unit or a product. As opposed to the Market Growth and Market Share dimensions of the BCG Matrix, the GE-McKinsey Matrix assesses the Industry Attractiveness and Business Unit Strength dimensions. The GE-McKinsey Matrix encompasses 9 grids, unlike the 4-grid BCG Matrix.

This presentation provides a detailed overview of the 5-step approach to formulating the GE-McKinsey Matrix:

1. Establish Industry Attractiveness of each business unit
2. Ascertain the Competitive Strength of each business unit
3. Outline the position of business units on the Matrix
4. Analyze the data
5. Ascertain the future direction and prioritize investments

The presentation also deliberates on the core components, the pros and cons associated with the GE-McKinsey Matrix, as well as provides a comparison of the framework with the BCG Matrix.

The slide deck also includes some slide templates for you to use in your own business presentations.

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