2. The GE/ MacKinsey matrix was developed in the 70’s
as a portfolio analysis matrix for business units.
It was developed by MacKinsey & Company, as part of
a consulting assignment for General Electric.
Most of the time the addition of “MAC KINSEY “ is
omitted and the model only refers to General Electric.
5. Stating the marketing strategy
6. Developing the operational marketing plan
4. Strategic Analysis
– SWOT-Analysis
– Portfolio Analysis
– Key issues
– Progress unchanged
– Definitive structural problem
1. Starting points
• Vision, mission
• Goals
• Current strategies
• Business
definition
3. Internal
Analysis
2. External
Analysis
Micro
Macro
GE Analysis / MABA:
• Portfolio analysis model
• More dimensional (multifactor)
For the use of :
• SBU’s (Strategical Business Units)
• PMC’s (Product Market Combinations)
• To see your relative position in a certain market
4. Examples of factors for MA ( Market Attractiveness) axis:
• Size of the market
• Expected (or previous) growth of the market
• Matter of competition
• Opportunities or threats (part of SWOT analysis)
• Entry barriers
1) Decide which factors you need to make your analysis:
Examples of factors for BA ( Business Attractiveness) axis:
• Relative market share
• Growth of share
• Brand awareness
• Vision, mission, effective strategy
• Strengths/ Weakness
• Current assets/ financial sources
6. S.No. Market 1 Market 2 Market 3 Market 4 Market 5
Factor Weight Scores
1 Market share 0.1 25 100 25 50 75
2 Relative growth 0.4 50 100 25 50 75
3 Brand value 0.2 50 100 25 50 75
4 Profitability 0.2 100 100 25 50 75
5 Entry barriers 0.1 100 100 25 50 75
1 62.5 100 25 50 75
BUSINESS ATTRACTIVENESS
10
0
10
0
66
66
33
33
0
0
MARKET
ATTRACTIVENESS
BUSINESS
ATTRACTIVENESS
77.5; 100
67.5; 75
42.5; 62.5
62.5; 50
30; 25
STRONG AVERAGE WEAK
STRONG
AVERAGE
WEAK
BIG
MARKET
SMALL
MARKET
BU
1
BU 2
BU 3
BU 4
BU 5
7. Advantages of GE Matrix:
• Helps to prioritize the limited resources in order to achieve the best
returns.
• Managers become more aware of how their products or business unit
perform.
• Identifies the strategic steps the company needs to make to improve
the performance of its business portfolio.
• It is more refined than the BCG Matrix as it replaces a single factor,
“market growth,” with many factors under “market attractiveness.
Similarly, competitive strength of a business unit in the GE Matrix
includes many more factors than just market share.
Disadvantages:
• But like the BCG Matrix, the GE Matrix also fails to consider
interdependencies between business units under one corporation and
their core competencies.
• The GE Matrix is complicated exercise that probably demands the
expertise of a consultant, which incurred an additional cost.
• It does not help in allocation the relative investments for each
products.
8. • Many businesses have multiple SBUs.
• It can be difficult to decide where to invest limited fund.
• The GE McKinsey Matrix provides a structured means to help.
• It works by plotting market attractiveness and business strength or
attractiveness.
• This is done not only for the current situation, but also for where each
SBU is expected to be in future.
Editor's Notes
Step 3: Determine the position of the units on the matrix: Mkt 1->42.5,62.5 Mkt2->77.5, 100 Mkt3->30, 25 Mkt4->62.5, 50 Mkt5->67.5, 75
Portfolio is the comprised of all products which an organization has.