Optimizing Resource Allocation Using the GE-McKinsey Framework PPT

This PPT slide, part of the 28-slide Strategy Classics: GE-McKinsey Matrix PowerPoint presentation, presents the GE-McKinsey Matrix, a strategic tool for evaluating business units based on 2 key dimensions: industry attractiveness and business unit strength. This 3x3 grid categorizes business units into nine distinct segments, each guiding investment decisions.

The upper left quadrant emphasizes "Grow / Invest," indicating that units in this area possess high market share and are situated in promising industries. These units are prime candidates for investment, as they are expected to yield high returns. Moving rightward, the "Hold / Protect" category suggests a more cautious approach. Here, business units are in ambiguous positions, warranting investment only if resources allow after addressing more profitable units.

The lower sections of the matrix shift focus. "Harvest / Divest" units are underperformers, either in unattractive industries or lacking competitive strength. This quadrant advises a strategic retreat or divestment. The matrix visually conveys that as one moves downwards, the attractiveness of the industry decreases, while moving right indicates a decline in business unit strength.

The slide also briefly compares the GE-McKinsey Matrix with the BCG Growth-Share Matrix, highlighting their shared purpose in facilitating informed strategic decisions. This comparison suggests that while both tools serve similar functions, the GE-McKinsey Matrix offers a more nuanced view by considering both industry attractiveness and business unit strength.

For executives, this matrix serves as a vital framework for resource allocation and strategic planning, ensuring that investments are directed towards the most promising opportunities while managing risks associated with weaker units.

This slide is part of the Strategy Classics: GE-McKinsey Matrix PowerPoint presentation.

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