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    General Electric Model (GE Multi-Factorial Analysis)

    Uploaded by

    Qaiser Abbas
    GE multi factorial analysis presentation and prepared by the students of IM Sciences. it will give you the bird eye view regarding GE Model.

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    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF or read online from Scribd

    General Electric Model (GE Multi-Factorial Analysis)

    Uploaded by

    Qaiser Abbas
    624 views15 pages
    GE multi factorial analysis presentation and prepared by the students of IM Sciences. it will give you the bird eye view regarding GE Model.

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    General Electric Model (GE Multi-factorial analysis)

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    GE multi factorial analysis presentation and prepared by the students of IM Sciences. it will give you the bird eye view regarding GE Model.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF or read online from Scribd
    Download as pptx or pdf
    624 views15 pages

    General Electric Model (GE Multi-Factorial Analysis)

    Uploaded by

    Qaiser Abbas
    GE multi factorial analysis presentation and prepared by the students of IM Sciences. it will give you the bird eye view regarding GE Model.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPTX, PDF or read online from Scribd
    Download as pptx or pdf
    of 15

    GENERAL ELECTRIC MODEL

    Group Members:

    Durr I Kamil

    Qaiser Abbas

    IM SCIEMNCES Peshawar

    INTRODUCTION
    Prepared

    by McKensey & Company Developed for General Electric in 1970s Also known as:
    GE multi factorial analysis Directional policy matrix McKensey Matrix 3*3 matrix

    DEFINITION

    The GE matrix is an alternative technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio and which market opportunities are worthy of continued investment. Purpose of GE model
    Strategy formulation Investment in each SBU Business analysis

    CONSTRUCTION

    There are 5 steps to construct GE Model Identification of SBUs or products. 2) What makes this market attractive? 3) Determination of SBUs position on the basis of factors. 4) Methods of measuring market attractiveness and business strengths. 5) Rank each SBU as high, medium or low.
    1)

    DIMENSIONS OF GE MODEL
    Market

    attractiveness

    Overall judgment of making good profits for long run MA can be measured through
    long run growth rate size of industry Current profitability of market SCP (structure conduct performance model) Porters five forces model

    Business

    strengths

    Sustainable competitive advantage of business BS can be measured through


    Share price Profitability Brand loyalty

    HOW TO CALCULATE MA AND BS


    o Market attractiveness
    = attractiveness factor 1 rating x attractiveness factor 1 weight + attractiveness factor 2 rating x attractiveness factor 2 weight +

    o Business strengths
    = strength factor 1 rating x strength factor 1 weight + strength factor 2 rating x strength factor 2 weight +

    FACTORS OF MA AND BS

    Market Attractiveness
    Industry size Annual growth rate Historic profit margin Long run growth rate Competitive intensity Ability to differentiate Technology required Energy required Environment impact Social/political aspect

    Business Strengths
    Market share Market growth Product price Product quality Brand reputation Customer loyalty Technology Distribution networks R&D performance Management

    GE MODEL
    High

    Market Attractiveness

    Medium

    Low

    High

    Medium

    Low

    Business Strengths

    STRATEGIES TO BE FOLLOWED:
    Invest/grow

    Fast growing SBUs Highly profitable Best SBUs for investment High advertisement High R&D Acquisition

    Selectivity/earnings

    Left over funds are invested Elastic (narrow/broad) Change in prospects Investment depends upon management and corporate capabilities

    Harvest/divest

    SBUs worse than average position. Retrenchment of expenditures. Minimization of investment Invest for sometimes for good reasons otherwise divest it.

    GE MODEL VS BCG MATRIX


    GE model is 3*3 matrix while BCG is 2*2 matrix GE model is the enlarge form of BCG matrix GE model is more powerful than BCG matrix GE model needs more time to prepare while BCG can be made quickly

    ADVANTAGES
    More sophisticated than BCG matrix Helps managers to think more strategically Helps to improve the performance of business Provide directions regarding resources allocation Helps in the growth of business Helps in downsizing Provides information about strengths and weaknesses Provides information about opportunities available in market

    LIMITATIONS
    There is no hard and fast rule on how to weight factors The interrelationship among SBUs is not taken into account It requires a huge amount of data & research Factors ranking is subjective and personal Time consuming & costly Proper implementation of strategies are absent

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