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GE Nine-Cell Matrix
Low
High
Medium
Average
Strong Weak
• Market Size
• Growth Rate
• Profit Margin
• Intensity of Competition
• Seasonality
• Cyclicality
• Resource Requirements
• Social Impact
• Regulation
• Environment
• Opportunities & Threats
• Relative Market Share
• Reputation/ Image
• Bargaining Leverage
• Ability to Match
Quality/Service
• Relative Costs
• Profit Margins
• Fit with KSFs
Industry
Attractiveness
Rating Scale: 1 = Weak ; 10 = Strong
6.7
3.3
10.0
1.0
1.0
3.3
6.7
Strategy Implications of
Attractiveness / Strength Matrix
• Businesses in upper left corner
– Accorded top investment priority
– Strategic prescription is grow and build
• Businesses in three diagonal cells
– Given medium investment priority
– Invest to maintain position
• Businesses in lower right corner
– Candidates for harvesting or divestiture
– May be candidates for an overhaul and re-position
strategy
The Attractiveness / Strength Matrix
• Allows for intermediate rankings between high and
low and between strong and weak
• Incorporates a wide variety of strategically relevant
variables
• Stresses allocating corporate resources to
businesses with greatest potential for
– Competitive advantage and
– Superior performance
Decide Resource Allocation Priorities
and Strategic Direction
• Objective:
– “Get the biggest bang for the buck”
in allocating corporate resources
• Procedure:
– Rank each business from highest to lowest priority
for corporate resource support and new investment
(steer resources to high opportunity areas and limit
support to low opportunity areas)
– Develop a general strategic direction for each
business
2 3 56
4

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GE Nine-Cell Matrix.ppt

  • 1. GE Nine-Cell Matrix Low High Medium Average Strong Weak • Market Size • Growth Rate • Profit Margin • Intensity of Competition • Seasonality • Cyclicality • Resource Requirements • Social Impact • Regulation • Environment • Opportunities & Threats • Relative Market Share • Reputation/ Image • Bargaining Leverage • Ability to Match Quality/Service • Relative Costs • Profit Margins • Fit with KSFs Industry Attractiveness Rating Scale: 1 = Weak ; 10 = Strong 6.7 3.3 10.0 1.0 1.0 3.3 6.7
  • 2. Strategy Implications of Attractiveness / Strength Matrix • Businesses in upper left corner – Accorded top investment priority – Strategic prescription is grow and build • Businesses in three diagonal cells – Given medium investment priority – Invest to maintain position • Businesses in lower right corner – Candidates for harvesting or divestiture – May be candidates for an overhaul and re-position strategy
  • 3. The Attractiveness / Strength Matrix • Allows for intermediate rankings between high and low and between strong and weak • Incorporates a wide variety of strategically relevant variables • Stresses allocating corporate resources to businesses with greatest potential for – Competitive advantage and – Superior performance
  • 4. Decide Resource Allocation Priorities and Strategic Direction • Objective: – “Get the biggest bang for the buck” in allocating corporate resources • Procedure: – Rank each business from highest to lowest priority for corporate resource support and new investment (steer resources to high opportunity areas and limit support to low opportunity areas) – Develop a general strategic direction for each business 2 3 56 4