1. This grid is an adaptation of the BCG approach and
was popularized by General Electric.
This grid makes an effort to overcome some of the
limitations of the BCG matrix.

2. GE grid deploys multiple factors to measure business
strength and industry attractiveness.
This grid uses factors such as market share, profit
margin customer and market knowledge, ability to
compete, technology, competitive position, and
management caliber to assess business strength.

3. It also gives due importance to industry
attractiveness factors such as market growth,
competition, seasonality and cyclical qualities, size
and industry profitability, economies of scale,
technology, and various social, environmental, legal
and human factors.
The position of the business is determined by
calculating subjective values of the two dimensions of
the grid.

4. The strategist first identifies the factors contributing
to the industry attractiveness.
Next, he assigns weights to each industry
attractiveness factor based on its perceived
importance relative to the other attractiveness factors.
Favorable to unfavorable future conditions are
forecasted and rated based on “0-to-1” scale. Thus, the
strategist obtains a weighted composite score for a
business’s overall industry attractiveness ,

5. Industry Weight Rating score
attractiveness
factor
Market size 20 0.5 10.0
Projected market 35 1.0 35.0
growth
Technological 15 0.5 7.5
requirements
Concentration ( a 30 0 0
few large
competitors)
Political and Must be ___ ___
regulatory factors nonrestrictive
Total 100 52.5

6. A similar procedure is followed in assessing the
business strength.
Business Weight Rating Score
strength factor
Relative market 20 0.5 10
share
Production
Capacity 10 1.0 10
Efficiency 10 1.0 10
location 20 0 0
Technological 20 0.5 10
capability
Marketing
Sales organization 15 1.0 15
Promotion 5 0 0
advantage
total 100 55

7. Once the comprehensive score has been calculated,
the scores are classified into ratings such as high,
medium, or low in terms of projected strength of the
business and the projected attractiveness of the
industry.
Next the business units are classified into three
categories.
First, invest/grow
Second, invest selectively and manage for earnings.
Third harvest or divest for resources.

8. Business units classified as invest/grow are given the
same preference as stars are given in the BCG matrix.
Resources are then allocated to pursue growth
oriented strategies.
Harvest/divest category is managed like the dogs in
the BCG matrix.
Organizations are encouraged to divest from these
businesses to finance other businesses.
Businesses classified in the selectivity/earnings
category are treated either as cash cows or as question
marks.