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GE - Nine Cell

The GE Nine Cell Matrix is a strategic planning tool that evaluates business units based on their industry attractiveness and competitive strength. It plots each business unit on a 3x3 grid based on whether their industry and competitive factors are high, medium, or low. Business units in the upper right "green zone" of high industry attractiveness and strength are candidates for investment and expansion. Those in the yellow zone require hold or maintain strategies. Business units in the lower left "red zone" of low attractiveness and strength should consider retrenchment strategies like restructuring or divestment.

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335 views12 pages

GE - Nine Cell

The GE Nine Cell Matrix is a strategic planning tool that evaluates business units based on their industry attractiveness and competitive strength. It plots each business unit on a 3x3 grid based on whether their industry and competitive factors are high, medium, or low. Business units in the upper right "green zone" of high industry attractiveness and strength are candidates for investment and expansion. Those in the yellow zone require hold or maintain strategies. Business units in the lower left "red zone" of low attractiveness and strength should consider retrenchment strategies like restructuring or divestment.

Uploaded by

Nikita Sangal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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Name of Institution

Global Strategic Analysis GE Nine Cell-MATRIX

Name of Institution

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.

What does it identify

Name of Institution

Uses two dimensions: - Industry Attractiveness - Business Strength (Competitive position)

Objective

Name of Institution

To position each SBU on the chart depending on SBUs strength and attractiveness of industry sector or market on which it is focused. Each axis is divided in Low, Medium or High axis.

Industry Attractiveness
Name of Institution

Market Size /Market growth Industry Profit MARGIN Technology Economies of scale Competitive Intensity Seasonality Cyclicality Environmental
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Business Strength

Name of Institution

Profit Margin Relative Market share Competitive Strength and weaknesses Technological Capability Ability to compete on price and quality Caliber of Management

Weightage
Factors weight Rating (0-1 scale) 0.8 1 0.7 0.6 0.8 0.5 0.5 15 15 10 10 20 5 5 12 15 7 6 16 2.5 2.5

Name of Institution

Weighted Score

20
Total

0.7

14
75(0.8)

Score: 0.5- (average)/medium) <0.5- low >0.5- high


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Name of Institution
Business Strength strong Average Weak

High

Invest/Expand Select/Earn

Industry Attractiveness

Low

Medium

Harvest/Divest

Green Zone

Name of Institution

Industry would like to be in Green zone, where Industry Attractiveness and Strength is more/medium. Strategy in this zone is to invest/expand. Choose among various investment strategies.

Name of Institution

Grow-Attract High Investment, firms may go for product differentiation or cost leadership, huge cash is generated and market leaders are there. Hold- Attract moderate investment, Market penetration. Followers exist here. Harvest- Unattractive players, low priority, diversification, M&A ,Acquisition takes place here.
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Yellow zone

Name of Institution

Different combinations of Industry attractiveness and Business strength. Hold and Maintain type strategies work here.

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Red zone

Name of Institution

Contains different industry attractiveness. Prescribes retrenchment strategies( Restructuring/ divestment/Liquidation/Turnaround

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