“GE McKinsey Matrix in Marketing Management”

The GE McKinsey Matrix (also called the GE Matrix or GE Business Screen) is a

portfolio analysis tool used in marketing management to help businesses evaluate and
prioritize their strategic business units (SBUs) or product lines based on Market
Attractiveness and Business Strength.

It was developed by General Electric (GE) in collaboration with McKinsey & Company
to provide a more detailed alternative to the BCG Matrix.

Structure of the GE McKinsey Matrix

The matrix is a 3x3 grid, dividing businesses or products into three categories:

1. Invest/Grow (Top Row - High Priority)

2. Selectively Invest/Hold (Middle Row - Medium Priority)
3. Harvest/Divest (Bottom Row - Low Priority)

The X-axis (Business Strength) evaluates how well a company can compete in a
particular market.
The Y-axis (Market Attractiveness) assesses the potential profitability and growth of
the market.

GE McKinsey Matrix Components with Examples

1. Market Attractiveness (Y-Axis) - External Factors

It includes factors such as:

✔ Market size and growth rate
✔ Profitability
✔ Competitive intensity
✔ Industry trends
✔ Regulatory environment

✅ Example:
The electric vehicle (EV) market is highly attractive due to growing demand,
government incentives, and environmental concerns. Companies like Tesla and
BYD operate in an attractive market.

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2. Business Strength (X-Axis) - Internal Factors

It includes factors such as:

✔ Brand strength
✔ Customer loyalty
✔ Market share
✔ Financial resources
✔ Innovation capability

✅ Example:
Apple has a strong brand, innovative technology, and a loyal customer base,
making it highly competitive in the premium smartphone segment.

Three Strategic Zones of the GE Matrix

1. Invest/Grow (High Market Attractiveness & Strong Business Strength - Top

Row)

✔ Companies should invest more in these businesses/products as they have high

potential.
✔ Strategies: Increase marketing, expand product lines, invest in R&D.

✅ Example:

 Amazon’s Cloud Services (AWS): A rapidly growing industry with strong

market potential. Amazon dominates with its technology and customer base.
 Tesla’s Electric Vehicles (EVs): Strong brand, high innovation, and a booming
industry.

2. Selectively Invest/Hold (Medium Market Attractiveness & Medium Business

Strength - Middle Row)

✔ Companies should selectively invest in these areas based on future potential.

✔ Strategies: Improve efficiency, differentiate products, focus on niche markets.

✅ Example:

 Samsung’s Foldable Phones: A promising innovation, but consumer adoption

is still growing.
 PepsiCo’s Plant-Based Snacks: The health-food trend is growing, but
competition is increasing.

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3. Harvest/Divest (Low Market Attractiveness & Weak Business Strength - Bottom
Row)

✔ These businesses are either in declining industries or face strong competition with
little potential.
✔ Strategies: Reduce investments, shift focus, or sell/divest.

✅ Example:

 Kodak’s Film Business: The decline of film cameras made this segment
unattractive.
 BlackBerry Smartphones: Once strong but lost relevance due to competition
from iPhones and Android devices.

How to Use the GE McKinsey Matrix in Marketing?

1. Evaluate Market Attractiveness (Is the industry growing?)

2. Assess Business Strength (Do we have competitive advantages?)
3. Categorize Products/SBUs (Invest, Hold, or Divest)
4. Develop Marketing Strategies (Allocate resources based on position)

GE McKinsey Matrix works in terms of the X-axis (Business Strength) and Y-axis
(Market Attractiveness):

X-Axis (Business Strength) → (Horizontal Axis)

 Strong (Right Side): The company has a competitive edge (e.g., strong brand,
high market share, innovation).
 Medium (Middle): The company has moderate competitive strength but needs
improvement.
 Weak (Left Side): The company struggles to compete effectively in the market.

Y-Axis (Market Attractiveness) ↓ (Vertical Axis)

 High (Top Row): Fast-growing and profitable markets with high demand.
 Medium (Middle Row): Stable but competitive markets.
 Low (Bottom Row): Declining markets with fewer opportunities.

Relationship in the Matrix

 Top-right (High Attractiveness, Strong Business Strength) →

INVEST/GROW 🚀
 Middle-center (Medium Attractiveness, Medium Business Strength) →
HOLD/SELECTIVE INVEST 🎯
 Bottom-left (Low Attractiveness, Weak Business Strength) → DIVEST/EXIT
⚠️

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Conclusion

The GE McKinsey Matrix helps marketers prioritize investments and resources

effectively. Companies like Apple, Amazon, and Tesla continuously use similar
frameworks to decide which products or business units to expand, maintain, or exit.

GE McKinsey Matrix for Marketing Management

Market
Attractiveness ↓ /
Strong Medium Weak
Business
Strength →
Invest Selectively
Invest / Grow 🚀
🎯
✅ Example: Divest / Exit ⚠️
✅ Example:
Amazon Web ✅ Example: Kodak’s
Samsung’s Foldable
Services (AWS) – Film Business –
High (Growing & Phones – Promising
Dominates cloud Digital photography
but niche market
Profitable Market) computing replaced film
✅ Example:
✅ Example: ✅ Example: Nokia’s
PepsiCo’s Plant-
Tesla’s EVs – Symbian Phones –
Based Snacks –
Market leader in Lost to iOS & Android
Growing health-
electric cars
conscious segment
Invest Selectively
🎯
Hold / Maintain 🏁 Divest Slowly ⏳
✅ Example:
✅ Example: Coca- ✅ Example: Canon’s
Apple’s iPads –
Cola’s Soft Drinks – Compact Cameras –
Medium (Stable Still profitable but
Mature market but Declining demand due
but Competitive declining tablet
strong brand to smartphones
Market) demand
✅ Example: Nike’s ✅ Example: Yahoo
✅ Example:
Performance Shoes Search – Lost
Netflix’s Content
– Competitive but relevance against
Streaming – High
stable Google
competition but
strong position
Harvest / Exit ⚠️
Liquidate / Sell 💀
✅ Example: Divest 🚫 ✅ Example:
BlackBerry
✅ Example: Blockbuster Stores –
Low (Declining & Phones – No
Less Profitable Microsoft’s Netflix disrupted rental
competitive edge
Market) Windows Phone – model
✅ Example: DVD
Couldn’t compete with ✅ Example: HTC
Rentals – Replaced iOS & Android Smartphones – Lost
by streaming
to newer brands
services

FACULTY, ASIF QURAISHI