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    GE Nine Cell Matrix

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    Isha Bhatt
    This document discusses the GE Nine Cell Matrix, which is a tool used in strategic portfolio analysis and planning. It involves plotting business units on a 3x3 grid based on their strength and the attractiveness of the industry they operate in. Strength and attractiveness are each rated as high, medium, or low. This helps identify where to allocate resources by placing business units into categories of grow, hold, or harvest. The document provides examples of factors used to evaluate strength and attractiveness, and gives an example analysis of Maruti Udyog using the GE Nine Cell Matrix.

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    GE Nine Cell Matrix

    Uploaded by

    Isha Bhatt
    45 views12 pages
    This document discusses the GE Nine Cell Matrix, which is a tool used in strategic portfolio analysis and planning. It involves plotting business units on a 3x3 grid based on their strength and the attractiveness of the industry they operate in. Strength and attractiveness are each rated as high, medium, or low. This helps identify where to allocate resources by placing business units into categories of grow, hold, or harvest. The document provides examples of factors used to evaluate strength and attractiveness, and gives an example analysis of Maruti Udyog using the GE Nine Cell Matrix.

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    This document discusses the GE Nine Cell Matrix, which is a tool used in strategic portfolio analysis and planning. It involves plotting business units on a 3x3 grid based on their strength and the attractiveness of the industry they operate in. Strength and attractiveness are each rated as high, medium, or low. This helps identify where to allocate resources by placing business units into categories of grow, hold, or harvest. The document provides examples of factors used to evaluate strength and attractiveness, and gives an example analysis of Maruti Udyog using the GE Nine Cell Matrix.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    45 views12 pages

    GE Nine Cell Matrix

    Uploaded by

    Isha Bhatt
    This document discusses the GE Nine Cell Matrix, which is a tool used in strategic portfolio analysis and planning. It involves plotting business units on a 3x3 grid based on their strength and the attractiveness of the industry they operate in. Strength and attractiveness are each rated as high, medium, or low. This helps identify where to allocate resources by placing business units into categories of grow, hold, or harvest. The document provides examples of factors used to evaluate strength and attractiveness, and gives an example analysis of Maruti Udyog using the GE Nine Cell Matrix.

    Copyright:

    © All Rights Reserved
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    Download as pdf or txt
    of 12

    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
    THANK
    YOU

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