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TUTORIAL

GE/McKinsey Matrix

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Overview
The GE/McKinsey matrix approach evaluates a business based on two composite dimensions: industry attractiveness
and business strength. These dimensions, in turn, consist of a series of weighted factors. Both the factor weights and
the factors themselves may vary from one application to another; for example, industry attractiveness includes
measures of market size, growth rate, competitive intensity, and the like, whereas business strength normally includes
such measures as market share, share growth, and product quality. Analysts assign each business a rating for each
factor and a weight to each factor. Multiplying the factor ratings by the weights produces a position for each business
on the strength/attractiveness matrix.

Although designed to mimic the GE approach to portfolio management, this model can also be used for any situation
in which a certain number of entities (e.g., companies, products, sales territories) can be ranked on one or more sets
of weighted factors.

The GE Portfolio approach helps firms answer such questions as:

✓ On which products, offerings, or divisions should we focus our efforts?

✓ What method can we use to assess and understand the weights that various members of the
management team assign to different dimensions?

✓ How can we reconcile different points of view regarding weights and evaluations given to various
factors by different groups within an organization?

Getting Started
To analyze a business using our GE/McKinsey matrix you can use your own data directly or one of the existing Enginius
data sets. The GE/McKinsey matrix utilizes several tables (data blocks in Enginius) as shown and described below.

The dialog box that is shown below is generated by using the Template icon on the left side of the Enginius dashboard
and selecting GE MCKINSEY MATRIX.

The template generation allows you to specify the model analysis specific to your study, as detailed below:

• General Options
This option section allows you to specify the number of weight sets you’d like in your study. An example of
weight sets might be Marketing, Sales, and Finance where each organization might have a differing view of
the weights of each product or product line.

You may also include dynamic ratings which provide the opportunity for those specifying ratings in the
above weight sets to also indicate how those ratings might change two years in the future.

If you want to be able to specify the size of each bubble (product or product line) check the Include bubble
sizes option. This allows you to specify the size of each product or product line in relation to the others.

The include market shares will generate a data block where you can specify the market share held by each

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product/product line.

The last general option is the number of options, which should equal the number of products or product
lines to be evaluated.

• Horizontal Axis
This section allows you to specify the number of rating dimensions. These are the products or product lines
to be evaluated.

• Vertical Axis
This section allows you to specify the number of rating categories in your study. Examples might be
features, market shares, brand reputation, etc. These are the categories that will be used by those rating
the products or product lines.

Example GE McKinsey Matrix template generation dialog box

After completing the above dialog box, the specified data blocks will be generated allowing you to complete the input
required for GE McKinsey analysis. Please note the final check box in the above diagram indicates whether you would
like the data blocks to be filled in with random data to give you an idea of what the final data input should look like.
Clicking “Run” will generate the template.

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Using the OFFICESTAR Tutorial

If you click on the Tutorials menu items along the left side of the Enginius dashboard and choose GE MCKINSEY MATRIX,
the OFFICESTAR example data set will open. The remainder of this tutorial will use the OFFICESTAR. Each of the data
block is described below and the diagram that follows shows the data blocks that are contains in this example.

▪ Horizontal rating data that names the products or services (column labels) and their rated strengths in
each market category (row labels).

▪ Horizontal dynamic data that names the products or services (column labels) and their evaluated
strengths in each market category (row labels) as they are projected two years in the future.

▪ Horizontal weights allow the user to evaluate views from different groups or organizations (e.g. marketing
and finance). Different groups in the organization often believe the various factors from the previous
two sections have different levels of importance. The analysis can take this divergence of opinion into
consideration and help illustrate how two different groups might disagree about the importance of a
factor, which indicates the relative positioning of the business units or products.

▪ Vertical rating data uses the same products/services as the Horizontal rating data (column labels).

▪ Vertical dynamic data uses the same structure as the Vertical rating data but contains the evaluated
values as they are projected 2 years in the future.

▪ Vertical weights use the same column labels as Horizontal weights table and the same row labels as the
Vertical dynamic table. This allows the user to weight organization input on the strength of the insight of
the organization.

▪ Bubble sizes allows the user to specify relative market shares for each product category.

▪ Market Shares allows the user to specify the current market share held by each product or service. These
sizes affect the size of the bubbles in the final GE charts.

Each of the tables (for the OFFICESTAR example data) are shown below.

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Running Analyses
To analyze the data you have selected, simply click on the Run GE MCKINSEY MATRIX model icon found on the Quick
Links section of the Enginius Dashboard. A dialog box will open allowing you to select the options to be used in the
analysis, as described below. For each option that allows for data selection, you will need to select the appropriate
data blocks for the model.

For the purposes of this tutorial, the following setup was used:

After making the desired, selections, press the “Run” icon and analysis will begin.

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 Reminder: Clicking the world icon beside the “Run” option will
allow you to choose a different output format for the report.

When analysis is complete, the following dialog box will appear:

Click “Show Report” and the Positioning Analysis report will open in a separate tab within your browser.

 Every report you run on Enginius is saved in your “Report

History”, shown at the top of the Enginius Dashboard. Such
reports are shown by run date but will have a generic name such
as GE McKinsey Matrix. You may click on each report and
rename it so it will be easier to differentiate multiple analyses.

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Interpreting the Results

Note: The output described below was taken from the Webpage option in the Run analysis choice.

 In the diagrams shown in this tutorial, the bubbles are shown

with Market Shares shown within the bubbles and directional
arrows and shadow bubbles reflecting the Dynamic Ratings,
showing the anticipated product movement 2 years in the
future. Both of these parameters are options controlled in the
Run Analysis menu.

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When interpreting the matrices, keep in mind that the most desirable items (e.g., business units or products on which
you should focus most of your efforts and allocate resources) are those that are large enough and ideally those in the
upper right corner of the matrix. You have particular strengths in pursuing these businesses, the industry is particularly
attractive, and the market is large enough to sustain the business.

References
Cooper, Robert G. (1993), Winning at New Products, Perseus Books: New York.

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