STRATEGIC MANAGEMENT

GE NINE CELL MATRIX

GE NINE CELL MATRIX
• The GE/McKinsey Matrix is a nine-cell (3 by 3) matrix
used to perform business portfolio analysis as a step in
the strategic planning process.
• The GE/McKinsey Matrix identifies the optimum business
portfolio as one that fits perfectly to the company's
strengths and helps to explore the most attractive
industry sectors or markets.
• The objective of the analysis is to position each SBU on
the chart depending on the SBUs Strength and the
Attractiveness of the Industry Sector or Market on which
it is focused. Each axis is divided into Low, Medium and
High, giving the nine-cell matrix as depicted below.
GE NINE CELL MATRIX
• Different factors can be used to define Industry
Attractiveness. Like:- Market Size, Market Growth Rate,
Demand variability, Industry Profitability, Competitive Rivalry,
Global Opportunities, Entry and exit barriers, Capital
requirement, Macro environmental Factors (PEST)
• Different factors can also be used to define SBU Strength.
Like:- Market Share, Distribution Channel Access, Financial
Resources, R&D Capability, Brand equity, Production Capacity,
Knowledge of customer and market, Caliber of management.
Relative cost position
• The factors and their relative weightings are selected. The
rating values for each factor are entered for each SBU and
Industry.
GE NINE CELL MATRIX
• GROW :Business units that fall under grow attract high
investment. Firms may go for product differentiation or Cost
leadership. Huge cash is generated in this phase. Market
leaders exist in this phase
• HOLD :Business units that fall under hold phase attract
moderate investment. Market segmentation, Market
penetration, imitation strategies are adopted in this phase.
Followers exist in this phase.
• HARVEST :Business units that fall under this phase are
unattractive. Low priority is given in these business units.
Strategies like divestment, Diversification, mergers are adopted
in this phase.
MARKET ATTRACTIVENESS
• Annual market growth rate
• Overall market size
• Historical profit margin
• Current size of market
• Market structure
• Market rivalry
• Demand variability
• Global opportunities
BUSINESS STRENGTH
• Current market share
• Brand image
• Production capacity
• Corporate image
• Profit margins relative to
competitors
• R & D performance
• Promotional effectiveness
GE NINE CELL MATRIX
STRENGTH
a) It allows intermediate ratings between high and low and
between strong and week.
b) It helps in channeling the corporate resources to business
and achieving competitive advantage and superior
performance.
c) It helps in better strategic decision making and better
understanding of business scope.

WEAKNESS
a)It tends to obscure business that are become to winners
because their industries are entering at exit stage.
b)Assessment of business in terms of two factors is not fair.
GE NINE CELL MATRIX – EXAMPLE: 1
ABOUT MARUTI UDYOG
• Founded in 1981
•Products are Maruti 800, Omni, Alto,SX4,Swift
Desire,Swift,A-star, Gypsy,Wagon R,Ritz,others.
• Vision – “The Leader in the Indian Automobile Industry,
Creating Customer Delight and Shareholder’s Wealth;a
Pride of India”
• Core Values : Our Core Values drive us in every endeavour-
 Customer Obession,
 Fast, Flexible & first mover,
 Innovation & creativity
 Networking & Partnership
 Openess & Learning
GE NINE CELL MATRIX – EXAMPLE: 2
THANK YOU