Portfolio Analysis through the GE-McKinsey Framework PPT

This PPT slide, part of the 93-slide Strategy Consulting Compendium PowerPoint presentation, presents the GE-McKinsey Matrix, a strategic tool designed for evaluating business units or product lines based on 2 critical dimensions: market attractiveness and competitive strength. Developed by McKinsey & Company in the 1970s and later adopted by General Electric, this matrix serves as a framework for portfolio analysis.

The matrix is structured into nine cells, each representing a unique combination of market attractiveness and competitive strength. The vertical axis indicates industry attractiveness, while the horizontal axis reflects the strength of the business unit. This layout allows companies to categorize their business units into distinct strategic positions, guiding investment decisions.

Market attractiveness is assessed through various factors, including market size, growth rate, profitability, and competitive intensity. On the other hand, competitive strength evaluates a business unit's standing relative to its peers, considering aspects like market share, brand strength, and technological advantages. This dual assessment helps organizations identify which business units warrant investment, which should be maintained, and which may need divestment.

The matrix's categorization into high, medium, or low attractiveness and strength provides a clear visual representation of where to focus resources. Companies can use this insight to prioritize investments effectively, optimize their portfolios, and enhance long-term growth and profitability. Overall, the GE-McKinsey Matrix offers a structured approach that aids executives in making informed strategic decisions regarding their business units.

This slide is part of the Strategy Consulting Compendium PowerPoint presentation.

This toolkit is created by trained McKinsey, BCG, and Porsche Consulting consultants and is the same used by MBB, Big 4, and Fortune 100 companies when performing Strategy Management Initiatives.

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