mba i mm-1 u-2.1 general electrical
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GE Nine Cell Matrix The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix usedto perform business portfolio analysis as a step in the strategicplanning process.
The GE/McKinsey Matrix identifies the optimum businessportfolio as one that fits perfectly to the company's strengthsand helps to explore the most attractive industry sectors ormarkets.
The objective of the analysis is to position each SBU on thechart depending on the SBU's Strength and the Attractivenessof the Industry Sector or Market on which it is focused. Eachaxis is divided into Low, Medium and High, giving the nine-cell matrix as depicted below.
GE Nine Cell MatrixDifferent 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
Attractiveness
Business Unit Strength
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
Current market share
Brand image
Production capacity
Corporate image
Profit margins relative to competitors
R & D performance
Promotional effectiveness
Business Strength
GE Nine Cell MatrixStrength
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.
• 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
About Maruti Udyog
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