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GE Nine Cell Matrix
GE Nine Cell Matrix
The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix used
to perform business portfolio analysis as a step in the strategic
planning process.

The GE/McKinsey Matrix identifies the optimum business
portfolio as one that fits perfectly to the company's strengths
and helps to explore the most attractive industry sectors or
markets.

The objective of the analysis is to position each SBU on the
chart depending on the SBU's Strength and the Attractiveness
of the Industry Sector or Market on which it is focused. Each
axis is divided into Low, Medium and High, giving the nine-
cell matrix as depicted below.
GE Nine Cell Matrix
 Different factors can be used to define Industry Attractiveness. Like:-
   Market Size, Market Growth Rate, Demand variability, Industry
  Profitability, Competitive Rivalry, Global Opportunities, Entry and exit
  barriers, Capital requirement, Macro environmental Factors (PEST)

 Different factors can also be used to define SBU Strength. Like:-
   Market Share, Distribution Channel Access, Financial Resources, R&D
  Capability, Brand equity, Production Capacity, Knowledge of customer
  and market, Caliber of management. Relative cost position

 The factors and their relative weightings are selected. The rating values
  for each factor are entered for each SBU and Industry.
GE Nine Cell Matrix
Industry                    Business Unit Strength
Attractiveness

                   Strong         Average            Weak


      High          Grow             Grow              Hold



    Medium          Grow             Hold             Harvest



      Low           Hold             Harvest          Harvest
GE Nine Cell Matrix
 Grow – Business units that fall under grow attract high
  investment. Firms may go for product differentiation or Cost
  leadership. Huge cash is generated in this phase. Market leaders
  exist in this phase.

 Hold – Business units that fall under hold phase attract moderate
  investment. Market segmentation, Market penetration, imitation
  strategies are adopted in this phase. Followers exist in this phase.

 Harvest - Business units that fall under this phase are
  unattractive. Low priority is given in these business units.
  Strategies like divestment, Diversification, mergers are adopted in
  this phase.
Market Attractiveness

   Annual market growth rate
   Overall market size
   Historical profit margin
   Current size of market
   Market structure
   Market rivalry
   Demand variability
   Global opportunities
Business Strength

  Current market share
  Brand image
  Production capacity
  Corporate image
  Profit margins relative to
  competitors
 R & D performance
 Promotional effectiveness
GE Nine Cell Matrix
Strength
a) It allows intermediate ratings between high and low and between
    strong and week.

b) It helps in channeling the corporate resources to business and
     achieving competitive advantage and superior performance.

c) It helps in better strategic decision making and better understanding
     of business scope.

 Weakness
a)It tends to obscure business that are become to winners because their
     industries are entering at exit stage.

b)Assessment of business in terms of two factors is not fair.
EXAMPLE OF GE NINE CELL MATRIX
About Maruti Udyog
• Founded in 1981
• Products are Maruti 800, Omni, Alto,SX4,Swift
  Desire,Swift,A-star, Gypsy,Wagon R,Ritz,others.
• Vision – “The Leader in the Indian Automobile
  Industry, Creating Customer Delight and
  Shareholder’s Wealth;a Pride of India”
• Core Values : Our Core Values drive us in every
  endeavour-
     Customer Obession,
     fast, Flexible & first mover,
     Innovation & creativity
     Networking & Partnership
     Openess & Learning
Ge9 final ppt
THANK
 YOU

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Ge9 final ppt

  • 1. GE Nine Cell Matrix
  • 2. GE Nine Cell Matrix The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix used to perform business portfolio analysis as a step in the strategic planning process. The GE/McKinsey Matrix identifies the optimum business portfolio as one that fits perfectly to the company's strengths and helps to explore the most attractive industry sectors or markets. The objective of the analysis is to position each SBU on the chart depending on the SBU's Strength and the Attractiveness of the Industry Sector or Market on which it is focused. Each axis is divided into Low, Medium and High, giving the nine- cell matrix as depicted below.
  • 3. GE Nine Cell Matrix  Different factors can be used to define Industry Attractiveness. Like:- Market Size, Market Growth Rate, Demand variability, Industry Profitability, Competitive Rivalry, Global Opportunities, Entry and exit barriers, Capital requirement, Macro environmental Factors (PEST)  Different factors can also be used to define SBU Strength. Like:- Market Share, Distribution Channel Access, Financial Resources, R&D Capability, Brand equity, Production Capacity, Knowledge of customer and market, Caliber of management. Relative cost position  The factors and their relative weightings are selected. The rating values for each factor are entered for each SBU and Industry.
  • 4. GE Nine Cell Matrix Industry Business Unit Strength Attractiveness Strong Average Weak High Grow Grow Hold Medium Grow Hold Harvest Low Hold Harvest Harvest
  • 5. GE Nine Cell Matrix  Grow – Business units that fall under grow attract high investment. Firms may go for product differentiation or Cost leadership. Huge cash is generated in this phase. Market leaders exist in this phase.  Hold – Business units that fall under hold phase attract moderate investment. Market segmentation, Market penetration, imitation strategies are adopted in this phase. Followers exist in this phase.  Harvest - Business units that fall under this phase are unattractive. Low priority is given in these business units. Strategies like divestment, Diversification, mergers are adopted in this phase.
  • 6. Market Attractiveness  Annual market growth rate  Overall market size  Historical profit margin  Current size of market  Market structure  Market rivalry  Demand variability  Global opportunities
  • 7. Business Strength  Current market share  Brand image  Production capacity  Corporate image  Profit margins relative to competitors  R & D performance  Promotional effectiveness
  • 8. GE Nine Cell Matrix Strength a) It allows intermediate ratings between high and low and between strong and week. b) It helps in channeling the corporate resources to business and achieving competitive advantage and superior performance. c) It helps in better strategic decision making and better understanding of business scope. Weakness a)It tends to obscure business that are become to winners because their industries are entering at exit stage. b)Assessment of business in terms of two factors is not fair.
  • 9. EXAMPLE OF GE NINE CELL MATRIX
  • 10. About Maruti Udyog • Founded in 1981 • Products are Maruti 800, Omni, Alto,SX4,Swift Desire,Swift,A-star, Gypsy,Wagon R,Ritz,others. • Vision – “The Leader in the Indian Automobile Industry, Creating Customer Delight and Shareholder’s Wealth;a Pride of India” • Core Values : Our Core Values drive us in every endeavour-  Customer Obession,  fast, Flexible & first mover,  Innovation & creativity  Networking & Partnership  Openess & Learning