Industry Data & Market Research

Strategic Planning with the GE (McKinsey) Matrix Framework

GE (McKinsey) Matrix is a technique that enables better strategic planning in business.

The GE Matrix, developed by McKinsey, is similar to the BCG Matrix as a way to make strategic decisions about business units or products.

Strategic Planning GE McKinsey Matrix Each product, brand, service, or potential product is mapped as a piechart onto this industry attractiveness/business strength space. The diameter of each piechart is proportional to the Volume or Revenue accruing to each opportunity, and the solid slice of each pie represents the share of the market enjoyed by the planning company.

The planning company should invest in opportunities that appear to the top left of the matrix. The rationale is that the planning company should invest in segments that are both attractive and in which it has established some measure of competitive advantage. Opportunities appearing in the bottom right of the matrix are both unattractive to the planning company and in which it is competitively weak. At best, these are candidates for cash management; at worst candidates for divestment. Opportunities appearing 'in between' these extremes pose more of a problem, and the planning company has to make a strategic decision whether to 'redouble its efforts' in the hopes of achieving market leadership, manage them for cash, or cut its losses and divest.

Other Strategic Planning Frameworks

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