General Electric (GE) Matrix

Roadmap For The Roadmap For The PresentationPresentation

ROADMAP

ABOUT GE MATRIX

CLASSIFICATION

BCG VS GE MATRIX

STRATEGIES

It is the management task It is the management task concerned with the growth concerned with the growth and future of business and future of business enterprise.enterprise.

It provides the route map It provides the route map for the firm and helps to for the firm and helps to take decision in the future take decision in the future with a greater awarenesswith a greater awareness..

STRATEGIC PLANNINGSTRATEGIC PLANNING

Developed by general electric & Company in Developed by general electric & Company in 1970’s.1970’s.

GE is a model to perform business portfolio analysis on GE is a model to perform business portfolio analysis on the SBU’s.the SBU’s.

GE is rated in terms ofGE is rated in terms of ‘‘MarketMarket AttractivenessAttractiveness && Business StrengthBusiness Strength’’

It is an Enlarged & Sophisticated version of BCGIt is an Enlarged & Sophisticated version of BCG.. Also called the nine cell matrix and stop light model.Also called the nine cell matrix and stop light model.

ABOUT GE MATRIXABOUT GE MATRIX

Classification M

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Strong Medium Weak

Lo

wM

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Hig

hBusiness Strength

Market AttractivenessMarket Attractiveness

Annual market growth rateAnnual market growth rate Overall market sizeOverall market size Historical profit marginHistorical profit margin Current size of marketCurrent size of market Market structureMarket structure Market rivalryMarket rivalry Demand variabilityDemand variability Global opportunitiesGlobal opportunities

Current market shareCurrent market share Brand imageBrand image Production capacityProduction capacity Corporate imageCorporate image Profit margins relativeProfit margins relative to competitorsto competitors R & D performanceR & D performance Promotional effectivenessPromotional effectiveness

Business StrengthBusiness Strength

LeaderLeader GrowthGrowth

Try Try HardHard

Strategies

GROWTH• Challenge for leadership• Remove weaknesses• Build selectively on strength

LEADER• Protect position•Invest to grow• Effort on maintaining strength

TRY HARD• Invest in most attractive segment• Invest in selected segments• Seek new segments to apply strength.• Build up ability to counter competition• Emphasize profitability by raising productivity

66

55

44

Strategies

4. Protect & Refocus• Manage for current earning• Defend strength

5. Selectivity for Earning• Protect existing program• Make contingency programs to protect your position.• Investments in profitable segments

6. Build Selectively • Seek niche market or specialization• Seek opportunities to increase strength • Withdraw if indication of sustainable growth are lacking

77

88 99

Strategies

8. Manage for Earnings• Protect position in profitable segment• Shift resources to more attractive segments.• Minimize investment

7. Limited Expansion •Boost cash flow as you exit the market•Look for ways to expand without high risk

9. Exit• Sell at time that will maximize cash value• Exit the market• Prune the product line

Study of TATAStudy of TATA

TATA

• IT (Information Technology) : TCS

• Consumer Durable : Automobiles, Titan,jewellery

etc.

•Textiles : Tata Fabrics.

GE Matrix For TATAGE Matrix For TATA

Business Strengths

Mar

ket

A

ttra

ctiv

enes

s

Low

High

WeakStrong

IT Consumer Durables

Textiles

Tata consultancy services

Number one software company in Asia. The Tata Group has earned the reputation of being

the leader in quality, innovation and unmatched customer service.

Provides business solutions and consultancy services. TCS offers a wide range of IT services, outsourcing

and business solutions. Also provides services like engineering and industrial

services, business process outsourcing etc.

Consumer durables

Consumer products: The Tata group has a strong and longstanding business in watches and jewellery, and a growing presence in the retail industry.

Some of the famous tata products and services are tata salt,tata ceramics, titan watches,tata sky, indigo airlines have a good market share and are still growing.

Tanishq jewellery as we all know is a brand name in itself.

Tata textile

TATA Group is also into the textile business but it is not that successful and need to grow and use the resources more carefully.

Like the other tata products ,the tata fabric is not so popular and most of the people are not even aware of the fact that tata is into the textile industry.

BCG & GE MatrixBCG & GE Matrix

Mar

ket

Att

ract

iven

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Business Strength

Mar

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Gro

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Relative Position

(Market Share)

BCG vs. GEBCG vs. GE

BCGBCG GEGE

Market Growth

Market share

4 cell

Multi Products

Market Attractiveness

Market strength

9 cell

Multi Business Units

Advantages of GE matrixAdvantages of GE matrix

Wide variety of variables are used.Wide variety of variables are used. Help the companies to develop feasible Help the companies to develop feasible

strategic alternatives.strategic alternatives. Better understanding of a business.Better understanding of a business. To channel the corporate resources to businessTo channel the corporate resources to business ..

DisadvantagesDisadvantages Assessment of business in two variables can Assessment of business in two variables can

be misleading.be misleading. Numerical value can not be assigned to these Numerical value can not be assigned to these

two variables properly.two variables properly. Relation between the market share and cost Relation between the market share and cost

saving is not directly proportional.saving is not directly proportional.