1. Strategic
Product
Management
GE - McKinsey Matrix
/PGDM/KIAMS/2021 A publication of
Dr. Rajesh K Satpathy

2. GE - McKinsey Matrix

3. What is GE - McKinsey Matrix?
The GE matrix was developed by Mckinsey and Company
consultancy group in the 1970s.
The nine cell grid measures business unit strength against industry
attractiveness and this is the key difference. Whereas BCG is limited
to products, business units can be products, whole product lines, a
service or even a brand. You can plot these chosen units on the
grid and this will help you as product managers to determine which
strategy to apply.
GE - McKinsey Matrix

5. Industry Attractiveness:
Factors you could choose
to base this on include...
Market size
Market growth
GE - McKinsey Matrix
Porters five forces
Competitive rivalry
Buyer power
Supplier power
Threat of new entrants
Threat of substitution
Pestel factors
Political
Economical
Social
Technological
Environmental
Legal

6. You need to decide which factors you will use as a determining
factor as these will be applied to ALL business units…
Step 1: Decide on determining factors
Step 2: Give each factor a weighting number based on its magnitude
(make the total weight of all factors add up to 1.00 or 10.00 for example)
Step 3: Rate each business unit against each factor on a scale.
For example 1 – 5 where 1 is extremely attractive and 5 is extremely
unattractive.
Step 4: Give each business unit a weighted rating on each factor by
multiplying its rating by the weight for that factor.
Step 5: Total up all the weighted ratings for each business unit.
GE - McKinsey Matrix

7. Business Unit Strength:
Factors to determine how strong a unit is compared to others in its
industry include…
Market share
Growth in market share
Brand equity
Profit margins compared to competition
Distribution channel process (the strength)
Repeat the earlier steps 1 to 5 here once again…
GE - McKinsey Matrix

8. Now you have the measurements
you can plot your business units on
the GE matrix and depending on
where they are plotted will determine
your strategy from one of the
following…
Grow/Invest:
Units that land in this section of the
grid generally have high market
share and promise high returns in the
future so should be invested in.
GE - McKinsey Matrix

9. Now you have the measurements
you can plot your business units on
the GE matrix and depending on
where they are plotted will determine
your strategy from one of the
following…
Hold/Selectivity:
Units that land in this section of the
grid can be ambiguous and should
only be invested in if there is money
left over after investing in the
profitable units.
GE - McKinsey Matrix

10. Now you have the measurements you
can plot your business units on the GE
matrix and depending on where they
are plotted will determine your strategy
from one of the following…
Harvest/Divest:
Poor performing units in an unattractive
industry end up in this section of the
grid. This should only be invested in if
they can make more money than is put
into them. Otherwise they should be
liquidated.
GE - McKinsey Matrix

12. Reliance Product portfolio includes its services in the Petroleum
and Natural Gas sector, Petrochemicals, Textiles, Retail,
Telecommunication, Entertainment, Financial Services and software.
For our analysis, let’s select a group of 5 business units from these
sectors that Reliance operates in…
1. Jio Communication
2. Vimal Apparel
3. Reliance Fresh
4. Jio Money
5. Colors
GE Matrix of Reliance Industries

13. Step1: Analysing the Market Attractiveness
(Data used may not be
accurate. Used just for
calculation example
purposes)

14. Step2: Analysis of Competitive Strength
(Data used may not be
accurate. Used just for
calculation example
purposes)

15. Step3: Plot the Matrix

16. Step4: Conclusion from the GE Matrix
As per the GE Matrix, all 5 business units fall in the category of
Invest and grow.
The company should be focusing on all these businesses in the
coming years as per our conclusion.

17. Thank You !!