GE Nine-Cell Matrix.ppt
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This document presents the GE Nine-Cell Matrix, which is used to evaluate different business units across multiple dimensions in order to determine strategic priorities and directions. The matrix evaluates units based on their industry attractiveness and competitive strength. Units in the upper left receive top investment priority, while those in the lower right are candidates for harvesting or divestiture. The matrix allows for intermediate rankings and incorporates various strategic factors to help allocate resources to units with the greatest potential for competitive advantage and performance.
GE Nine-Cell Matrix.ppt
- 1. GE Nine-Cell Matrix Low High Medium Average Strong Weak • Market Size • Growth Rate • Profit Margin • Intensity of Competition • Seasonality • Cyclicality • Resource Requirements • Social Impact • Regulation • Environment • Opportunities & Threats • Relative Market Share • Reputation/ Image • Bargaining Leverage • Ability to Match Quality/Service • Relative Costs • Profit Margins • Fit with KSFs Industry Attractiveness Rating Scale: 1 = Weak ; 10 = Strong 6.7 3.3 10.0 1.0 1.0 3.3 6.7
- 2. Strategy Implications of Attractiveness / Strength Matrix • Businesses in upper left corner – Accorded top investment priority – Strategic prescription is grow and build • Businesses in three diagonal cells – Given medium investment priority – Invest to maintain position • Businesses in lower right corner – Candidates for harvesting or divestiture – May be candidates for an overhaul and re-position strategy
- 3. The Attractiveness / Strength Matrix • Allows for intermediate rankings between high and low and between strong and weak • Incorporates a wide variety of strategically relevant variables • Stresses allocating corporate resources to businesses with greatest potential for – Competitive advantage and – Superior performance
- 4. Decide Resource Allocation Priorities and Strategic Direction • Objective: – “Get the biggest bang for the buck” in allocating corporate resources • Procedure: – Rank each business from highest to lowest priority for corporate resource support and new investment (steer resources to high opportunity areas and limit support to low opportunity areas) – Develop a general strategic direction for each business 2 3 56 4