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Ge

  1. 1. General Electric (GE) Matrix
  2. 2. Roadmap For The Presentation ROADMAP STRATEGIC PLANNING BCG & GE MATRIX ABOUT GE CLASSIFICATION STRATEGIES BCG v/s GE CASE STUDY
  3. 3. <ul><li>It is the management task concerned with the growth and future of business enterprise. </li></ul><ul><li>It provides the route map for the firm and helps to take decision in the future with a greater awareness </li></ul>Strategic Planning
  4. 4. BCG & GE Matrix Market Attractiveness Firm’s Business Strength Market Growth Relative Position (Market Share)
  5. 5. <ul><li>Developed by McKinsey & Company in 1970’s. </li></ul><ul><li>GE is a model to perform business portfolio analysis on the SBU’s. </li></ul><ul><li>GE is rated in terms of ‘ Market Attractiveness & Business Strength ’ </li></ul><ul><li>It is an Enlarged & Sophisticated version of BCG. The matrix is divided into 9 cells , it has 3 zones , one at the upper left, one at the lower right and one central-diagonal </li></ul>About GE Matrix
  6. 6. <ul><li>The upper left zone represents business that are most important to the company: </li></ul><ul><li>the lower right zone represents business that are least important : and </li></ul><ul><li>the central diagonal zone represents businesses that are medium in their importance. </li></ul><ul><li>Using the ratings in the matrix, the firm can appropriately set its objectively and strategies in respect of each of its businesses . </li></ul>
  7. 7. <ul><li>This Planning matrix ,holds that a company can suitably rate its different businesses for the purpose of strategic planning on the basis of two main parameters- (1) Industry attractiveness , and (2) Company’s Business Strength . </li></ul><ul><li>When the industry concerned is highly attractive and the company has the best of strengths for excelling in that industry, the business is rated as the most important one to the company. </li></ul><ul><li>When the industry concerned is least attractive and the company's strength for excelling in that industry is also very low, the business is rated as the least important one. </li></ul><ul><li>The other businesses will occupy a position somewhere between the two extremes. </li></ul><ul><li>This is the idea of GE Matrix. </li></ul>
  8. 8. Classification Market Attractiveness Strong Medium Weak Low Medium High Firm’s Business Strength 5.00 1.00 2.33 3.67 5.00 3.67 2.33
  9. 9. Overview Firm’s Business Strengths Market Attractiveness Low High Low High Attractive Moderate Attractive Unattractive
  10. 10. <ul><li>Annual market growth rate </li></ul><ul><li>Overall market size </li></ul><ul><li>Historical profit margin </li></ul><ul><li>Current size of market </li></ul><ul><li>Market structure </li></ul><ul><li>Market rivalry </li></ul><ul><li>Demand variability </li></ul><ul><li>Global opportunities </li></ul>Market Attractiveness
  11. 11. <ul><li>Current market share </li></ul><ul><li>Brand image </li></ul><ul><li>Brand equity </li></ul><ul><li>Production capacity </li></ul><ul><li>Corporate image </li></ul><ul><li>Profit margins relative to competitors </li></ul><ul><li>R & D performance </li></ul><ul><li>Managerial personal </li></ul><ul><li>Promotional effectiveness </li></ul>Business Strength
  12. 12. Strategies <ul><li>Invest to Build </li></ul><ul><ul><li>Challenge for leadership </li></ul></ul><ul><ul><li>Build selectively on strength </li></ul></ul><ul><li>Protect Position </li></ul><ul><ul><li>Invest to grow </li></ul></ul><ul><ul><li>Effort on maintaining strength </li></ul></ul><ul><li>Build Selectively </li></ul><ul><ul><li>Invest in most attractive segment </li></ul></ul><ul><ul><li>Build up ability to counter competition </li></ul></ul><ul><ul><li>Emphasize profitability by raising productivity </li></ul></ul>
  13. 13. Strategies <ul><li>Protect & Refocus </li></ul><ul><ul><li>Manage for current earning </li></ul></ul><ul><ul><li>Defend strength </li></ul></ul><ul><li>Selectivity for Earning </li></ul><ul><ul><li>Protect existing program </li></ul></ul><ul><ul><li>Investments in profitable segments </li></ul></ul><ul><li>Build Selectively </li></ul><ul><ul><li>Specialize around limited strength </li></ul></ul><ul><ul><li>Seek ways to overcome weaknesses </li></ul></ul><ul><ul><li>Withdraw if indication of sustainable </li></ul></ul><ul><ul><li>growth are lacking </li></ul></ul>
  14. 14. Strategies <ul><li>Manage for Earnings </li></ul><ul><ul><li>Protect position in profitable segment </li></ul></ul><ul><ul><li>Upgrade product line </li></ul></ul><ul><ul><li>Minimize investment </li></ul></ul><ul><li>Limited Expansion for Harvest </li></ul><ul><ul><li>Look for ways to expand </li></ul></ul><ul><ul><li>without high risk </li></ul></ul><ul><li>Harvest </li></ul><ul><ul><li>Sell at time that will maximize cash value </li></ul></ul><ul><ul><li>Cut fixed costs and avoid investment </li></ul></ul><ul><ul><li>meanwhile </li></ul></ul>
  15. 15. Case Study
  16. 16. Overview Business Strengths Market Attractiveness Low High Low High Attractive Moderate Attractive Unattractive
  17. 17. Case Study of TATA <ul><li>TATA </li></ul><ul><ul><li>IT (Information Technology) : TCS </li></ul></ul><ul><ul><li>Consumer Durable : Automobiles, Titan etc. </li></ul></ul><ul><ul><li>Textiles : Tata Fabrics, West Sides etc </li></ul></ul>
  18. 18. GE Matrix For TATA Business Strengths Market Attractiveness Low High Low High IT Consumer Durables Textiles
  19. 19. BCG v/s GE Market Attractiveness Market strength 9 cell Multi Business Units Secondary tools Market Growth Multi Products Primary tools 4 cell Market share GE BCG
  20. 20. <ul><li>Corporate Strategies - Bani Banerjee </li></ul><ul><li>Marketing Management - Philip Kotler </li></ul><ul><li>Strategic Planning - V S Ramaswamy </li></ul>Bibliography

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