What is the General Electric McKinsey Matrix?
The "Boston Matrix" has become one of the most important analysis tools in the consulting industry, but it has also been criticized by many people. Some people feel that the four quadrants of the Boston matrix "cash cows, stars, problems, and thin dogs" are too simple, and the two-dimensional "relative market share, market growth rate" is too rough. And this was why the General Electric matrix (GE Matrix) came from.
BCG Matrix vs General Electric Matrix
The GE matrix (also known as GE McKinsey Grid) was developed by McKinsey & Company Consulting in the 1970s. Like the BCG matrix, the GE/McKinsey matrix now helps companies make investment and divestment decisions related to their business units. But unlike a BCG matrix with four cells, it has nine. It uses industry attractiveness and business unit strength as the criteria for its measurements.
9 Cells instead of 4 Cells
In General Electric matrix, it expands the 2x2 four-quadrant matrix into a 3x3 nine-square grid.
· Competitive strength is divided into strong, medium and weak;
· Industry attractiveness is divided into high, medium and low.
· In this way, the General Electric matrix has become a nine-square grid.
