The GE matrix (also known as the McKinsey matrix or the Boston Consulting Group matrix) is a tool used in strategic management to evaluate the potential of a company's business units or products. It is a two-dimensional matrix that plots a business unit's market attractiveness on one axis and its competitive position on the other.
ITC is a multinational conglomerate based in India with a diverse portfolio of businesses including fast-moving consumer goods, hotels, paper, and agribusiness. Using the GE matrix, we can evaluate the potential of each of these business units within the context of the overall company.
Starting with market attractiveness, this axis measures the size and growth of the market, as well as the intensity of competition within it. ITC's fast-moving consumer goods business, for example, operates in a large and growing market with intense competition. This would likely be plotted in the upper-right quadrant of the matrix as a "star."
On the other axis, competitive position measures the strength and stability of a company's position within the market. ITC's hotels business, for example, operates in a market with high barriers to entry and strong brand recognition. This would likely be plotted in the lower-left quadrant of the matrix as a "cash cow."
Overall, the GE matrix can be a useful tool for ITC in evaluating the potential of its various business units and making strategic decisions about resource allocation and investment. By plotting each business unit on the matrix and considering its market attractiveness and competitive position, ITC can make informed decisions about which businesses to invest in and grow, and which to divest or manage for stability.
ITC analysis, using management tools
Where will the business invest? Let's learn them in more detail. The matrix itself is represented by four quadrants on a typical cartesian graph. You should consider dropping these business units so that you can devote more time and resources toward business units that can generate larger returns. Give each of your product a score out of 10 based on the factors that you have listed. The matrix helps corporations prioritize their investments among their business units, leading to three possible scenarios: invest, protect, harvest, and divest.
Itc's Ge Matrix
Businesses that fall into this category should be harvested or divested. That plate of food that you want to return to, over and over again. These classifications are based on the growth rate of the industry and the market share of the respective businesses which are relative to the largest competitor present, for that reason, BCG Matrix is also called as Growth-Share Matrix Also, Read the BCG Matrix of ITC BCG Matrix of ITC contains the Dogs, Stars, Cash Cows, and the Question Mark. A low sugar version of its popular white chocolate Milkybar was pulled from sale in 2020 just two years after it was launched because of a disagreeable taste. These categories are again divided into their individual divisions. How you'll go about making decisions regarding the future strategy is where the BCG matrix helps us.
GE McKinsey Matrix: Definition, Examples, and Limitations
For example, one SBU may score a 6 for industry size while a smaller industry may score a 3. GE-McKinsey Nine Box Matrix Industry Attractiveness Industry attractiveness indicates how hard or easy it will be for a company to compete in the market and earn profits. These divisions further have numerous brands under them. They generally have the largest profits but needs a lot of cash to finance rapidly. Despite, those small nuances, the GE matrix is still one of the best management tools for the marketers. The area of each circle is proportionate to industry sales. With the GE Matrix, we can build a prioritization pipeline to understand what initiatives and products the company can push forward.
What Is The GE McKinsey Matrix And Why It Matters In Business
Note also that the nine cells are divided by a diagonal line running from the bottom left to the top right of the matrix. They have leveraged the unique advantages that India offers in terms of diversity and heritage. The nine cells of the GE matrix represent various degrees of industry attractiveness high, medium or low and business strength strong, average and weak. But, in this article, I will share with you the science and logic behind why do prices end in 99. It allows organizations to conduct effective portfolio planning based on the strength and industry attractiveness of each business unit. Bring us your need, we'll deliver a trusted training workflow solution.
