A PRESENTATION ON BCG AND GE/MCKINSEY MATRIX

By-:SAEED INAMDARSHASHANK SHETTY

WHY WE USE BCG AND GE MATRIX? The BCG and GE have proven over the

years to be useful tools in order to assess the strength of a company’s portfolio of products relative to the attractiveness of the market they inhabit.

They can be used internally as a strategy tool.

Externally as a competitive intelligence technique, with their strength lying in their ease of use and interpretation.

The Best War Tactics

BCG MATRIX-BackgroundBCG(Boston Consultancy

Group),developed by Bruce Henderson in 1970.

BCG is also referred to as “The Growth-Share Matrix”.

It is mainly used for multi-product companies.

It is used as a portfolio planning and analysis tool for strategy development.

BCG Positions Throughout The Product Lifecycle

BCG-MATRIX

LIMITATIONS OF BCG MATRIXBCG uses only two dimensions that is

relative market share and market growth rate.

High market share is not only the success factor.

It was not considered as flexible enough to include all the broader issues that the company was facing.

GE/McKinsey MatrixThe GE/McKinsey Matrix was developed

jointly by McKinsey and General Electric in 1970s.

It is also popular as “Directional Policy Matrix”.

It helps in better strategic decision making and better understanding.

It helps in better resource allocation.

GE Over BCGMARKET ATTRACTIVENESS replaces Market

growth BUSINESS UNIT STRENGTH replaces Market shareBCG Matrix is used for the product analysis while

GE Matrix is used by the Business Strategic Units(BSU’s)

MARKET ATTRACTIVENESSAnnual market growth rateOverall market sizeHistorical profit marginCurrent size of marketMarket structureMarket rivalryDemand VariabilityGlobal opportunities

BUSINESS UNIT STRENGTHCurrent market shareBrand imageProduction CapacityCorporate imageProfit Margins relative to

competitorsR & D performancePromotional effectiveness

ZONES OF GE MATRIX

EXAMPLE OF MARUTI SUZUKI’S GE AND BCG MATRIX