1. The GE/Mc Kinsey Matrix
PREPARED BY
DESAIPET PRAVEEN
ROLLNO.505516423022
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2. Business Redefined – modern era
Wealth maximization and Societal developments
It has to include long term growth
Business cannot explained in terms of profit only
Business is something which is managed by people
Business is NOT only for profit
According to Peter F.Drucker
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4. Objective – 1 Survival
It’s the will and anxiety to go into the
future as long as possible.
It is of high prominence in the initial time of
business and gains more importance during
adverse times.
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6. Objective – 3 Growth
An objective which is associated with dynamism, vigour,promise and
success.
It can be displayed in various ways viz. Increase in assets, sales, manpower,
profits and market share. It can be organic as well as inorganic
Organic : Grow the business on your own
Ex: “Tata Nano”
In organic : Grow by acquiring other business
Ex: “Tata acquiring jaguar & landrover
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7. Objective -4 Efficiency
Look for the best way in anything we do
Utilizing resources in the highest productive combination
It is the economic version of technical productivity – designing and
achieving suitable output of funds, resources, facilities and efforts.
Example: Airtel sold paper recharge vouchers.
Airtel reduced its burden of printing , coding, inventorising , money
collection by selling E- Recharge vouchers through agents.
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8. Objective – 5 Profitability
The primary objective of
any business is profit
and it is the sole source
of all other objectives.
All other objectives are
facilitative and are
meant to be subservient
to the profit motive
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9. Practical application of business
objectives in a company
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s.no. Objectives Practical application
1 Survival Trying to get as much subscribers as possible
by marketing and promotion
2 Stability Keeping the customers happy with the service
promised
3 Growth Getting more customers on the basis of
performance achieved or acquiring similar
company
4 Efficiency Finding better ways of servicing the
customers and reducing the cost
5 Profitability Reaping the benefit of the work done
12. 3. OPPORTUNITY
An opportunity is a favorable condition in the
organization’s environment , which enables it to consolidated
and strengthen its position.
Ex : Growing demand for the products or services that a
company provides.
4. THREAT
A threat is an unfavorable condition in the
organization's environment which creates a risk for, or causes
damage to, the organization.
Ex : The emergence of strong new competitors
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13. SWOT ANALYSIS EXAMPLE – NOKIA
BEFORE INTRODUCING THE ANDROID
TECHNOLOGY
Strength – features like Durability & Easy navigation
Weakness – Not able to cope with changing technology
Opportunity- Wide Customer Base for its products
Threat – Competitors at global as well as local level and
fast changing technology
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15. BCG MATRIX
BCG matrix is a framework created by Boston Consulting
Group to help corporations to analyze their business units
, that is, their product lines. This helps the company
allocate resources and is used as an analytical tool in
brand marketing, product management , strategic
management , and portfolio analysis.
It classifies business portfolio into 4
categories based on industry attractiveness
(growth rate of that industry) and
competitive position ( relative market share).
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16. BCG MATRIX Cont…
These two dimensions reveal likely
profitability of the business portfolio in
terms of cash needed to support that unit
and cash generated by it.
The general purpose of the analysis is to help
understand, which brands the firm should
invest in and which ones should be
divested.
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19. There are four quadrants into which
Firms Business units are Classified:
Stars. Stars operate in high
growth industries and
maintain high market
share. Stars are both cash
generators and cash users.
They are the primary units
in which the company
should invest its money,
because stars are expected
to become cash cows and
generate positive cash
flows. Yet, not all stars
become cash flows.
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stars
20. QUESTION MARKS(?)
Question marks(?) are business operating in a high market
growth , but having a low market share. They are a starting
point for most businesses. Question marks have a potential to
gain market share and become stars , and eventually cash
cows when market growth slows.
If question marks do not succeed in becoming a market leader,
then after perhaps years of cash consumption, they will
degenerate into dogs when market growth declines.
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21. CASH COWS
CASH COWS is where a company has high market share in
a slow – growing industry. These units typically generate
cash in excess of the amount of cash needed to maintain
the business.
They are to be “milked” continuously with as little
investment as possible, since such investment would be
wasted in an industry low growth.
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22. DOGS
DOGS are low-growth, low share businesses and product.
They may generate enough cash to maintain themselves , but
do not have much future. Sometimes they may need cash to
survive.
Dogs should be minimized by means of divestment or
liquidation. This may adopt “divest” strategy.
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23. Benefits of Matrix
Easy to perform
Helps to understand the strategic positions of
business portfolio
It’s good starting point for further more thorough
analysis.
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24. This is a form of portfolio
analysis used for
classifying product lines
or strategic business units
within a large company
The GE/Mc Kinsey Matrix
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25. It assesses areas of the business in terms
of criteria:
GE Matrix contd ….
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