The GE matrix is a strategic analysis tool used to evaluate a strategic business unit's (SBU) overall strength. It analyzes both external factors of market attractiveness and internal factors of competitive strength to map SBUs on a grid. Market attractiveness considers industry measures like size, growth, and profitability, while competitive strength examines assets, brand strength, costs, and management. The matrix then recommends resource allocation strategies to grow, hold, or harvest SBUs based on their positioning. While more complex than the BCG matrix, it provides a multidimensional analysis of an SBU's market opportunity and strength.

1. G. E. Multifactor Analysis
Strategic Analysis – Portfolio
Submitted For Perusal , to ______________________________
BY CHARLIE

2. What ?
 G.E. multi-factor analysis is a technique used in brand marketing and
product management to help a company decide what product(s) to add
to its product portfolio and which opportunities in the market they should
continue to invest in.
 It is conceptually similar to B.C.G. analysis, but somewhat more
complicated. Like in BCG Analysis, a two-dimensional portfolio matrix is
created. However, with the GE model the dimensions are multi-factoral.
 One dimension comprises nine industry attractiveness measures; the other
comprises twelve internal business strength measures. The G.E matrix helps
a strategic business unit evaluate its overall strength.
 Each product, brand, service, or potential product is mapped in this
industry attractiveness/business strength space. The GE multi factoral was
first developed by Mckinsey for General Electric in the 1970s.
 It analyzes market attractiveness and competitive strength to determine
the overall strength of an SBU.
BY CHARLIE

3. How ?
The G.E matrix is constructed in a 3x3 grid with Market Attractiveness
plotted on the Y-axis and Business Strength on the X-axis, both being
measured on a high , medium or low score.
Five steps must be considered in order to formulate the matrix
The range of products produced by the SBU must be listed
Factors which make the particular market attractive must be
identified
Evaluating where the SBU stands in this market
Processes through which calculations about business strength and
market attractiveness can be made
Determining which category an SBU lies in; high, medium, or low.
BY CHARLIE

4. What Basis ?
 Market Attractiveness
Market attractiveness deals with different external factors. These factors can
include such things as market size, market growth rate, and market profitability.
External factors that can affect market attractiveness also include pricing
trends, competitive intensity, overall risk, and entry barriers.
Other considerations regarding market attractiveness include what if any
opportunities there are to differentiate products and services, demand
variability, segmentation, distribution structure, and technology development.
 Competitive Strength
Competitive strength focuses on internal factors and the ability of the SBU to
overcome specific issues with the market and competitors. Different internal
factors that need to be considered include assets and competencies, brand
strength, market share, market share growth, and customer loyalty. Other
factors that should be considered include relative cost position, profit margins,
innovation, quality, financial resources, and management strength.
BY CHARLIE

5. Sample Copy
BY CHARLIE

6. Final Copy
BY CHARLIE

7. Strategic Implications
Resource allocation recommendations can be made to grow, hold, or harvest
a strategic business unit based on its position on the matrix as follows:
Grow strong business units in attractive industries, average business units in
attractive industries, and strong business units in average industries.
Hold average businesses in average industries, strong businesses in weak
industries, and weak business in attractive industries.
Harvest weak business units in unattractive industries, average business units in
unattractive industries, and weak business units in average industries.
There are strategy variations within these three groups. For example, within the
harvest group the firm would be inclined to quickly divest itself of a weak
business in an unattractive industry, whereas it might perform a phased harvest
of an average business unit in the same industry.
BY CHARLIE

8. Strategy Plot
BY CHARLIE

9. Advantages
 Raises awareness between managers about the performance of
their products in the market and aids in developing strategies to
get maximum returns from the resources available.
 Helps extract information about a business unit's strengths and
weaknesses and to devise strategies to accelerate and improve
performance.
 Aids the business in growing and in providing information about
potential market opportunities.
 It is more complex in comparison to the BCG matrix.
BY CHARLIE

10. Limitations
 There is no set rule to 'weight' factors and this process may be
subjective across different business unit's. For example, the weight
given to a factor by one business may be different to the
weight/importance given to it by another.
 The formulation of a G.E. matrix is very expensive and time
consuming.
 Investment strategies are often not implemented in an accurate
and proper manner.
 The dynamics among SBU's themselves are not taken into
account.
BY CHARLIE

11. Summary
 The GE matrix analyzes market attractiveness and competitive
strength to determine the overall strength of an SBU.
 External factors of market attractiveness that affect a business
include market size, market growth, entry barriers, segmentation, and
overall risk.
 Internal factors of competitive strength include assets,
competencies, brand strength, profit margins, innovation, and
quality.
 The GE matrix can also be used to determine if an organization
should enter a market or if it should reposition a product line or brand
within a market.
 SBU--A mid-sized business or a division of a corporation that has
different strategies and objectives than its parent company.
BY CHARLIE

12. ADD- Comparison with BCG
 When compared to the BCG matrix consisting of four cells, the GE
matrix is more complex with its nine cells.
 This means it not only takes longer to construct, but also to
implement. The BCG matrix is a lot more simpler and the factors
needed to construct it are accessed more easily and quickly
 It takes into account a wide range of factors when determining
market attractiveness and business strengths, which is replaced by
market share and market growth in the BCG matrix.
 Also, where factors are classified in the G.E matrix as high, medium
and low, those in the BCG matrix are divided between high and low.
 Moreover, the G.E matrix overcomes many of the limitations and
constraints of the BCG matrix.
BY CHARLIE

13. THANKYOU 
BY CHARLIE