The GE McKinsey Matrix or GE Matrix is a variant of the Boston Consulting Group (BCG) portfolio analysis Portfolio.
The GE McKinsey Matrix has also many points in common with the MABA analysis. MABA is an acronym that stands for Market, Attractiveness, Business position and Assessment.
The GE McKinsey Matrix also compares product groups with respect to market attractiveness and competitive
power. Another name for this type of analysis is Portfolio analysis.
The portfolios of businesses consist of all combinations of products and/ or services that are offered to the market/
target groups. Originally, the GE McKinsey Matrix made an analysis of the composition of the portfolio of GE business units. Later, the matrix proved to be very useful in other companies as well.
The GE McKinsey Matrix comprises two axes.
The attractiveness of the market is represented on the y-axis and the competitiveness and competence of the
business unit are plotted on the x-axis.
Both axes are divided into three categories (high, medium, low) thus creating nine cells.
The business unit is placed within the matrix using circles. The size of the circle represents the volume of the turnover. The percentage of the market share is entered in the circle. An arrow represents the future course for the business
unit.
E McKinsey Matrix factors
It is possible to determine in advance whether a market is attractive enough to enter. This can be done by using the following factors:
• Market size
• Historical and expected market growth rate
• Price development
• Threats and opportunities (component of SWOT Analysis)
• Technological developments
• Degree of competitive advantage
Other factors are used to determine competitiveness:
• Value of core competences
• Available assets
• Brand recognition and brand strength
• Quality and distribution
• Access to internal and external finance resources
Also Read: BCG Matrix