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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.
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.
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.
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 ,
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
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
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.
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.

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Modified ge model

  • 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.