A

PRESENTATION

ON

“ G E MATRIX ”

SUBMITTED TO

PROF. VIRENDRA PATIL

SUBMITTED BY

Mr. PRASHANT G. MISHRA

(Marketing)

(2011-2013)

SHIVAJIRAO .S JONDHALE INSTITUTE OF MANAGEMENT SCIENCE AND RESEARCH

ASANGAON – THANE

INTRODUCTION

“In consulting engagements with General Electric in the 1970's, McKinsey

& Company developed a nine-cell portfolio matrix as a tool for screening GE's

large portfolio of strategic business units (SBU). This business screen became

known as the GE/McKinsey Matrix and is shown below”

The GE / McKinsey matrix is similar to the BCG growth Share Matrix in that it maps

strategic business units on a grid of the industry and the SBU's position in the

industry. The GE matrix however, attempts to improve upon the BCG matrix in the

following two ways

Cont….

• The GE matrix generalizes the axes as "Industry Attractiveness" and

"Business Unit Strength" whereas the BCG matrix uses the market

growth rate as a proxy for industry attractiveness and relative market

share as a proxy for the strength of the business unit.

• The GE matrix has nine cells vs. four cells in the BCG matrix

CONT…

• Some factors that can be used to determine business unit strength include:

• Market share• Growth in market share• Brand equity• Distribution channel access• Production capacity• Profit margins relative to competitors

CONT…..• industry attractiveness, which is determined by factors such as the

following:

• Market growth rate• Market size• Demand variability• Industry profitability• Industry rivalry• Global opportunities• Macro environmental factors

Cont…..

HARVEST

HARVEST

HARVEST

INVESTMENT ANG GROWTH

INVESTMENT ANG GROWTH

INVESTMENT ANG GROWTH

SELECTIVE EARNING

SELECTIVE EARNING

SELECTIVE EARNING

The GE/McKinsey Matrix

Business Strengths

Indu

stry

Att

racti

vene

ss

High Medium Low

Hig

h

Med

ium

Low Invest in,

growth strategy

Monitor performance, selective strategy

No growth or investment, consider divestment or liquidation

• Market size & growth• Industry profit margins• Competitive intensity• Seasonality• Cyclicity• Economies of scale• Technology• Social, environmental, legal,

& human impacts

• Relative market share• Profit margins• Ability to compete on price & quality• Knowledge of customer & market• Competitive strengths & weaknesses• Technological capability• Caliber of management

Hindustan Unilever Ltd.

Indian Tobacco Company

Nirma Ltd

Nestlé India Dabur India Ltd

Henkel Spic

Cadbury India Modi Revlon Godfrey Phillips

BUSINESS ATTRACTIVNESS

BUSINESS STRENGTH

HIGH

MEDIUM

LOW

STRONG MEDIUM LOW

FMCG INDUSTRIES

CONT……

• HUL is leader in the market is has high business strength and high industry

attractiveness .

• ITC has medium business strength and high industry attractiveness. So it

can invest more to become a leader.

• Nestle India has strong business strength and medium industry

attractiveness. So it can invest more to become a leader.

• Godfrey Phillips has low business strength and low industry attractiveness.

So it can divest.

• Cadbury India has strong business strength and low industry attractiveness.

So it can invest more to have stable in market.