Ge nine cell matrix the gemckinsey matrix is a ninecell 3 by 3 matrix usedto perform business portfolio analysis as a step in the strategicplanning process. Difference between bcg and ge matrices with comparison chart. This article, the fourth in the series, examines the growth share matrix, a portfolio management tool developed by bcg founder bruce henderson. Strategies for hospital leadership identifying strengths, allocating hospital resources and focusing on profitable niche leadership page 2 boston consulting group matrix the hospital leadership should combine the mix of looking at the business lines through the bcg matrix, and also assess such questions as porter would set forth.
There was a dissatisfaction from the returns on investment from many of the products. Ge mckinsey matrix smi strategic management insight. In 1971 mckinsey and co developed the business screen for general electric to differentiate the potential for future profit in each of the 43 strategic business units. Boston consulting group bcg matrix is a four celled matrix a 2 2 matrix developed by bcg, usa.
One of the bestknown portfolio tools is the bcg matrix. Methods of strategic analysis and proposal method of. The boston consulting group bcg is a renowned organization. Both bcg matrix and ge matrix are twodimensional models, that are. The gemckinsey matrix identifies the optimum businessportfolio as one that fits perfectly to the companys strengthsand helps to explore the most attractive. Pdf strategic analysis through the general electric. Instead of the four cells that are created in the bcg matrix, the ge mckinsey matrix creates nine cells. Whilst the ge mckinsey matrix is more complex, it overcomes some of the disadvantages of the bcg matrix, including. Conversely, industry attractiveness and business strengths are two factors of ge matrix. One that arose in the early 1970s was the gemckinsey ninebox framework, following on the heels of the boston consulting groups.
Similar to this, ge matrix also helps firms decide their strategy with respect to different product lines, i. Analisis dan pilihan strategi matriks swot, space, bcg. In 1971, mckinsey and company developed a portfolio management tool for general electric ge. In response, management thinkers developed frameworks to address this new complexity. The application of mckinsey matrix in determination of. Relative cost position the factors and their relative weightings are selected.
The two dimensions on which bcg matrix is based are market growth and market share. It provides a graphic representation for an organization to examine different businesses in its portfolio on the basis of their related market share and industry growth rates. Ge nine cell matrix strategic management economies. Whereas bcg is limited to products, business units. Matriks bcg adalah perangkat strategi untuk memberi pedoman pada keputusan alokasi sumber daya berdasarkan pangsa pasar dan pertumbuhan ubs. Using the boston consulting group portfolio matrix to. Explain porters 5 force model, bcg matrix and ge nine cell matrix. Bcg growthshare matrix and gemckinsey nine cell matrix. The analysis tools used in this study were bcg matrix, life cycle model, ife, ifi and ge matrix. The boston consulting group matrix provides the recommendations for the development of strategic resource allocation and strategy development in the typical multibusiness company.
Ge mckinsey matrix ge nine cell matrix marketing 91. Final ge nine cell matrix microeconomics marketing. The gemckinsey matrix and its limitations for business. External to an organization will also be the impact of technological advancements and regulatory changes on product and service development and life cycle. Difference between bcg and ge matrices with comparison. Where the bcg matrix only has 4 quadrants with focus on business unit and market share, the mckinsey matrix is a finer example of plotting the actual market conditions against the firms potential to stand up in the current market. Madhuri bhawana patial prabhjeet kaur pooja bhandari gurjeet singh the ge multi factoral was first developed by mckinsey for general electric in the 1970s. The ge mckinsey matrix ge mckinsey model nine box matrix. Ge nine cell matrix management guru management guru. This matrix was created by mckinsey consulting company for ge. The gemckinsey matrix has nine cells in contrast to the bcg matrix that has only four and enables more detailed analyses. A business portfolio is the collection of all the business units within a corporation and a large corporation has normally many sbus. The m atrix is established in 1970 by bruce d oolin henderson 1915 1992 for the bcg in. The optimal business portfolio is one that fits perfectly to the companys strengths and helps to exploit the most attractive industries or.
Industry attractiveness and business unit strength are calculated by first identifying criteria for each. Ge ninebox matrix is a strategy tool that offers a systematic approach for the multi business enterprises to prioritize their investments among the various. The ge matrix generalizes the axes as industry attractiveness and business unit strength whereas the bcg matrix uses the market growth rate as a proxy for industry attractiveness and relative market share as a proxy for the strength of the business unit. These forces determine the intensity of competition and hence the profitability and attractiveness of an industry. The bcg matrix was developed by the boston consulting group. Bcg matrix is not flexible where as ge 9 cell model consider all the factors related to market attractiveness. In addition to market share the ge mckinsey matrix also considers the strength of a business unit.
Gemckinsey matrix brief history in the late sixties and early seventies, while the boston consulting group were devising the bcg or growth share matrix. Porter has identified five competitive forces that shape every industry and every market. Gemckinsey matrix sood 2010 major reference works wiley. Popularly referred to as the mckinsey matrix or the industry attractiveness business strength matrix figure 1, was to evaluate each ge business unit along the composite dimensions of industry attractiveness and business strength. Matriks bcg merupakan empat kelompok bisnis, yaitu. Ge matrix in hindi general electric stoplight matrix. The bcgmatrix was developed by the boston consulting group in the late 1960s. At least, it was hard until the bcg matrix and its improved version gemckinsey matrix came to help.
Ge matrix foundation developed by mckinsey in 1970 also popular as directional policy matrix consists of 9 cell matrix same as bcg matrix just better 9. Strategies for hospital leadership identifying strengths. The portfolio matrix plots the different businesses on two axes. The ge matrix mckinsey matrix mkm is a model to perform a business portfolio analysis on the strategic business units of a corporation a business portfolio is the collection of strategic business units that make up a corporation. Also, the size of each circle represents the percentage sales contribution of each division, and pie slices reveal the percentage profit contribution of each division in both. Strategic management growthshare matrix, bcg matrix the bcg matrix b. In the 1970s, general electric company was an umbrella corporation managing a wide array of complex and unrelated products. At the height of its success, the growth share matrix was used by about half of all fortune 500 companies. The internalexternal ie matrix is similar to the bcg matrix in that both tools involve plotting organization divisions in a schematic diagram. The assessment of market attractiveness helps to ensure that business. Q5 explain porters 5 force model bcg matrix and ge nine. Advantages and limitations of ge ninecell matrix balanced score card.
The ge matrix has nine cells vs four cells in the bcg matrix. Ge nine cell matrix another popular corporate portfolio analysis technique is the result of pioneering effort of general electric company along with mckinsey consultants which is known as the ge nine cell matrix. The optimal business portfolio a dream for all organizations is the combination of multiple sbus such that it helps to exploit the. Comparison and usage of the boston consultingprotfolio and the. The results showed that relative positioning of crackers. It is argued that relative competitive position and growth are the two fundamental parameters which must be considered in. Bcg matrix boston consulting group group analysis of companies sbu, product lines, products and services. The nine cells of the ge matrix represent various degrees of industry attractiveness high, medium or low and business strength strong, average and weak. Tanda tanya question mark divisi dalam kuadran i memiliki posisi pangsa pasar relatif yang rendah, tetapi mereka bersaing dalam industri yang. With the rise of multibusiness enterprises in the 20th century, companies began to struggle with managing a number of business units profitably. Conduct an internet search for bcg growthshare matrix and gemckinsey nine cell matrix and learn how these tools are used to build strategic plans.
In many cases, decisionmaking involves the allocation of large sums of money to existing or new markets. This matrix is also known as the industry attractiveness business strength matrix and the ninebox matrix. After plotting each product line or business unit on the nine cell matrix, strategic choices are made depending on their position in the matrix. Bcgs competitors naturally wanted to get on the band wagon and both mckinsey and arthur d little developed a method involving matrices of nine cells instead of the bcg fourcell model see for example industry attraction and strategic position. The divisions or products compromise the organisations business portfolio. Matrix prepared by chirag dangol denish maharjan dolma tsering gurung content construction of ge 9 cell matrix introduction ge 9 cell matrix factors of market attractiveness strategy implications example maruti advantages and disadvantages ge vs bcg conclusion. The specialty unit is appraised against relative piece of the pie and industry development rate in former matrix however the business unit is appraised against business quality and industry allure in later. The nine cell grid measures business unit strength against industry attractiveness and this is the key difference. Bcg matrix is a matrix used by large corporations to decide the ratio in which resources are allocated among various business segments. Detailed concept of ge matrix in hindi general electrics stoplight matrix 2. The gemckinsey matrix and its limitations for business portfolio analysis. It is the most renowned corporate portfolio analysis tool. It was published in one of bcgs short, provocative essays, called perspectives.
The bcg model is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. Little adl matrix, the product life cycle and the ansoff matrix among others. Bcg matrix is simpler in comparison to ge matrix, as the former is easy to draw and consist of only four cells, while the latter consist of nine cells. The ge mckinsey matrix does not only consider growth, it mainly considers market attractiveness. Boston consulting group matrix bcg this technique is particularly useful for multidivisional or multiproduct companies. Strategic analysis through the general electricmckinsey.
To ensure longterm value creation, a company should have a portfolio of products that contains both highgrowth products in need of cash inputs and lowgrowth products that generate a lot of cash. Overall, the ge mckinsey matrix is an improvement over the bcg matrix. The boston consulting groups strategy institute is taking a fresh look at some of bcgs classic thinking on strategy to explore its relevance to todays business environment. A business portfolio is defined as a collection of strategic business units, commonly called sbus, that make up a firm or a corporation. Strategies used in each stage of ge matrix investgrow, hold, harvestdivest. Bcg framework comprises of four cells whereas ge framework comprises of nine cells. The composition of the portfolio can be critical tothe growth and success of the company.