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Ge Matrix: Boston Consulting Group Portfolio Matrix

The document discusses portfolio planning methods, specifically the McKinsey & General Electric Matrix. It explains that the matrix identifies a company's strategic business units and assesses them based on their market attractiveness and competitive strength. Factors that determine market attractiveness are discussed, such as market size, growth, profitability and competitive intensity. Factors that determine competitive strength are also outlined, like strength of assets/competencies, market share, cost position and record of innovation.

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P Venkatesan
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29 views

Ge Matrix: Boston Consulting Group Portfolio Matrix

The document discusses portfolio planning methods, specifically the McKinsey & General Electric Matrix. It explains that the matrix identifies a company's strategic business units and assesses them based on their market attractiveness and competitive strength. Factors that determine market attractiveness are discussed, such as market size, growth, profitability and competitive intensity. Factors that determine competitive strength are also outlined, like strength of assets/competencies, market share, cost position and record of innovation.

Uploaded by

P Venkatesan
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOC, PDF, TXT or read online on Scribd
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Ge matrix

The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and helps exploit the most attractive opportunities. The company must: (1) Analyse its current business portfolio and decide hich businesses should receive more or less investment! and (") #evelop gro th strategies for adding ne products and businesses to the portfolio! hilst at the same time deciding hen products and businesses should no longer be retained. The t o best$kno n portfolio planning methods are the %oston &onsulting 'roup (ortfolio )atrix and the )c*insey + 'eneral ,lectric )atrix (discussed in this revision note). -n both methods! the first step is to identify the various .trategic %usiness /nits (0.%/'s0) in a company portfolio. An .%/ is a unit of the company that has a separate mission and ob1ectives and that can be planned independently from the other businesses. An .%/ can be a company division! a product line or even individual brands $ it all depends on ho the company is organised. The McKinsey / General Electric Matrix The )c*insey+', )atrix overcomes a number of the disadvantages of the %&' %ox. 2irstly! market attractiveness replaces market growth as the dimension of industry attractiveness! and includes a broader range of factors other than 1ust the market gro th rate. .econdly! competitive strength replaces market share as the dimension by hich the competitive position of each .%/ is assessed. The diagram belo illustrates some of the possible elements that determine market attractiveness and competitive strength by applying the )c*insey+', )atrix to the /* retailing market:

Factors that Affect Market Attractiveness 3hilst any assessment of market attractiveness is necessarily sub1ective! there are several factors hich can help determine attractiveness. These are listed belo : $ )arket .i4e $ )arket gro th $ )arket profitability $ (ricing trends $ &ompetitive intensity + rivalry $ 5verall risk of returns in the industry $ 5pportunity to differentiate products and services $ .egmentation $ #istribution structure (e.g. retail! direct! holesale Factors that Affect ompetitive !trength 2actors to consider include: $ .trength of assets and competencies $ 6elative brand strength $ )arket share $ &ustomer loyalty $ 6elative cost position (cost structure compared ith competitors) $ #istribution strength $ 6ecord of technological or other innovation $ Access to financial and other investment resources

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