For Brand Marketing and Product Management – Use GE-McKinsey Matrix

GE-McKinsey or nine-box matrix offers a systematic approach for the decentralized corporation to decide where to better invest its cash.

Instead of depending on the predictions of its potential expectations from each business segment, the organization should evaluate a unit by two criteria that will decide whether it can perform well in the future including: the attractiveness of the relevant industry and the unit’s competitive strength within that industry.

Introduction
Components of a GE-McKinsey Matrix
What is a GE-McKinsey Matrix used for
When to use GE-McKinsey Matrix
Using the Tool
Example of GE-McKinsey Matrix
GE-McKinsey Matrix tips
Advantages and Disadvantages of GE-McKinsey Matrix

Introduction

The GE-McKinsey Matrix is an overview of the business portfolio that provides a systematic way for business units to be measured on two main dimensions: the attractiveness of the market involved and the importance of the role of the organization in that market.

The outcome is a graphical representation of these main aspects of the different business units and offers insight into a decision on resource allocation.

The GE/McKinsey matrix is equivalent to the growth-share matrix of the BCG in that it maps strategic business units on an industry grid and the industry role of the SBU.

However the GE matrix attempts to enhance the BCG matrix in two ways: the GE matrix generalizes the axes as “Industry Attractiveness” and “Business Unit Strength” while the BCG matrix utilizes the market growth rate as a proxy for the attractiveness of the industry and relative market share as a proxy for the strength of the business unit.

Industry attractiveness and business unit strength are determined by first determining parameters for each one, evaluating the value of each parameter in the criteria and multiplying the value by a weighting factor. The outcome is a quantitative indicator of the competitiveness of the market and the relative success of business units in that industry.

This nine-box matrix plots the business units on its nine cells. These cells indicate whether the company should:

Invest in a Product (Grow)
Leave a product as is (Hold)
Drop a product (Divest)

The business units are evaluated on two axes:

Industry attractiveness
Business unit strength

Various variables in the industry attractiveness and business unit strength determine to what degree a corporation can invest or divest a business unit.

Components of a GE-McKinsey Framework

The GE-McKinsey focuses on 2 variables:

Industry attractiveness shows how difficult or easy it would be for a business to succeed in the market and gain profits. The more successful the industry is the more enticing it becomes.

Analysts should look at how an industry can evolve in the long run rather than in the immediate future when determining the attractiveness of the industry, since the investments required for the product typically require long-lasting dedication. The attractiveness of the industry consists of many factors which collectively determine the degree of competition therein.

Competitive strength of a business unit

Along the X axis, the matrix measures how strong a particular business unit is in terms of competition, against its rivals. In other terms, managers attempt to determine whether or not a business unit has a permanent (or at least temporary) competitive advantage. If the company has a competitive advantage that is sustainable, the next question is “How long will it last?”

Factors that Affect Industry Attractiveness

In several respects, determining Industry attractiveness is subjective in nature. Despite this, there are several variables that can be ranked to help us assess the attractiveness of the market, including:

Market size
Expected market growth rate
Market profitability trend
Pricing trends
Competition level
Ability to differentiate
Demand variability

Factors that Affect Competitive Strength

Competitive strength considers whether the SBU has a competitive advantage over rivals in terms of materials. This is more of an objective calculation, again. To help assess competitive intensity, variables to be graded include:

Total market share
Market share growth relative to competitors
Customer loyalty
Relative brand strength, brand recognition
Cost structure compared to competitors
Distribution strength and production capacity
Management strength

The nine-box matrix plots the business units on its nine cells. Here is an explanation of what each option means:

Protect Position: Invest to protect and expand rapidly in the business position.

Invest to Build: Invest by building on strengths to improve the market place. Manage vulnerability zones.

Build Selectively: To boost the ability to fight competition, specialize in a potentially restricted set of strengths. Withdraw from the market if there is no chance of sustained growth or competitive advantage.

Manage for Earnings: Invest in those areas within these SBUs where earnings are good and risks are reasonably low. To maintain profits, upgrade the most profitable product lines.

Expand or Harvest: Expand only if minimum investment is necessary to do this. Otherwise by streamlining processes, harvest the investment.

Protect Position and Refocus: Determine whether the company can be reoriented so that the company’s current strengths are transferred to a new market segment.

Divest: Cut costs and quickly stop investment. To sell to realize the company’s cash value.

Strategic Implications of the GE McKinsey Matrix

Recommendations for resource allocation can be made for a strategic business unit to grow, hold or harvest based on its role on the matrix as follows:

Grow: Business units in these boxes, guarantee the highest returns in the future. Investments in research and development, advertising, acquisitions and to increase the production capacity to meet the demand in the future. It is essential to provide the funds and resources needed to remove all obstacles to their growth. Examples of units of business that are likely to grow:

Strong business units in attractive industries
Average business units in attractive industries
Strong business units in average industries

Hold: The business units in these boxes are the most uncertain, and only cash and resources you have left over from investing in stronger business units should be invested. Examples of business units that are uncertain:

Average businesses in average industries
Strong businesses in weak industries
Weak business in attractive industries

Divest/Harvest: these business units are performing relatively poorly. In addition, they do not have competitive advantages that are sustainable and they are unable to achieve these benefits. In order to devote more time and resources to business units that can generate greater returns, you should consider dropping these business units. Examples of business units you should divest and harvest:

Weak business units in unattractive industries
Average business units in unattractive industries
Weak business units in average industries

What is a GE-McKinsey Matrix used for

The GE-McKinsey Matrix enables organizations to compare different business units based to two commonalities – market attractiveness and business strengths. It is useful in reconciling different points of view across the business, or unifying weightings methods used by different management teams.

You should clearly rely on the forecasts from each business unit leader when determining the business units. If you follow this approach, the business unit manager’s ability to get their point across can affect your decisions. To meet their predictions, each manager may also use distinct methods.

Other models have been developed since this one, as more factors affect business competitive advantage and industry attractiveness in today’s business climate, but the model still proves to be an excellent tool for guiding thinking when making annual investment decisions about various business units or product categories.

When to use GE-McKinsey Matrix

In brand marketing and product management, the GE-McKinsey Matrix is used. The analysis helps businesses determine what products need to be added to a portfolio of products as well as what other investments can continue to receive opportunities.

The GE version, while similar to the BCG matrix, is a lot more complicated. The analysis starts as a two-dimensional matrix of the portfolio, but with nine industry attractiveness measures and twelve company strength measures, the dimensions are multifactorial.

When resources become more and more limited, the business world is becoming increasingly focused on its investment decisions. Each decision must make the best use of investments and seek to achieve the greatest return on the investment.

For diversified companies, since various goods, brands and portfolios need to be handled, the battle for capital allocation becomes much more complicated. This matrix helps businesses make these choices more consistently and in a more educated way.

Using the Tool

There are no established processes or models that managers could use when performing the analysis. Therefore, we designed the following steps to facilitate the process:

Step 1. Determine industry attractiveness of each business unit

Make a list of factors: The first thing you’ll need to do is to identify which factors to include when measuring the attractiveness of the industry. We have provided the list of most common variables, but the variables that are most appropriate for your industries should be included.

Assign weights: Weights indicate how important a factor is to the attractiveness of the industry. Each factor should be assigned a number from 0.01 (not significant) to 1.0 (very important). All weights should be equal to the total of 1.0.

Rate the factors: For each of your products or business units, the next thing you need to do is to score each factor. Choose values from ‘1-5’ or ‘1-10’ where ‘1’ means low attractiveness in the industry and ‘5’ or ’10’ high attractiveness in the industry.

Calculate the total scores: The total score for each business unit is the sum of all the weighted ratings. By multiplying weights and ratings, weighted scores are computed. Total scores allow for each business unit to compare industry attractiveness.

Step 2: Determine the Competitive Strength of each Business Unit

With the industry attractiveness out of the way, this step takes a look at the competitive strength of each company in much the same way as step 1.

Compile a list of factors: As before, you can select from a list of common competitive strength determinants, but you should try to make them as important as possible to the specific company.

Assign weights: According to their significance in helping the business gain sustainable competitive advantage, the selected variables are then given weighting. The weights can be from 0.01 and 1.0 as before, with the sum equal to 1.

Rate Factors: The ranking for each factor needs to be calculated for each product or business unit once the weights have been allocated. Such scores may be between 1-5 or 1-10. 1 is the lowest, with the highest scores being 5 or 10.

Calculate Total Score: Multiple the weight of each factor with the rating for each of the business units and add up to achieve a total score.

Step 3: Plot the business units on a matrix

The business units can now be plotted in the matrix with all the required scores in hand. A circle with the size of the circle reflecting the same proportion as the business revenue that the unit brings in for the company is denoted for each unit.

Step 4: Analysis of Information

There are three steps an organization can take for each unit on the basis of the position of each business unit in the matrix. Such measures include invest/grow, selectivity/earnings, and harvest/divest. Each unit falls within a certain collection of boxes and the action to be taken is dictated by this position.

Invest/Grow: These are the units that since they guarantee the greatest potential returns, will attract the most investment. These units would also need significant amounts of investment due to their growth potential to allow them to develop or sustain their share in a growing industry.

Selectivity/Earnings: Investment is put into these business units if there is some to spare after giving it to those units in the grow category. These are uncertain businesses and it cannot be confirmed with any clarity if they will continue as is, expand or decline in the future. If the unit is in a significant and larger market, then investing more to hold a step in the door can be worthwhile.

Harvest/Divest: These are units in an unattractive industry with no sustainable competitive advantage. They are still unable to gain any advantage and perform according to standards. If the business has surplus cash, so in those units that manage to make enough cash to break even, there may be investment and there is some competitive benefit to keep them around. If this is not the case, then it is necessary to sell and liquidate the units.

Step 5: Identify future direction of each unit

Is the market going to get more or less appealing, or will it remain the same? Competitive strength can rise or decrease. With this knowledge, if the potential in any field is expected to increase or decrease, the measures to be taken may be dramatically altered.

Within the matrix, an arrow is added to each circle, showing its future direction.

Step 6: Prioritize Investments

The final step in the study of the matrix is to determine in practice where and how the company’s investment decisions are made. In addition to the matrix analysis, some questions that might need to be answered include:

Are some units really worth the investment?
How much should be invested in each unit?
Which area within a unit should get more investment than others? For example, should the funds go to research and development, marketing, value chain development or customer development)

Example of GE-McKinsey Matrix

Example of GE-McKinsey Matrix of Walmart Inc.

As you can see above on a two-dimensional matrix, the end result is to plot businesses, products, or strategic business units (SBU’s). Compared to the company/SBU, against the overall market power of that company/SBU, this matrix reveals overall industry attractiveness.

The findings are plotted on a matrix of 9 boxes. The green color boxes show a good match between strength and attractiveness in the industry, and the company should therefore invest in this field.

The diagonally running yellow/gold cells suggest a fair market opportunity that the organization can either keep or selectively look to enhance, but without the green cells proposed maximum investment.

The red cells are a poor match of the attractiveness of both industry and relative business strength, and the firm is playing the wrong markets here and somewhere else, such as in the green cells sector, should look to divest and use the money more effectively.

Step 1 : Rate the Business Strength factors

List the factors: To determine the Business strengths of Business units including Fashion, Supermarkets, Online Store, Sam’s Club and Electronics Store, the following are among the factors that can be taken into consideration: Brand equity, Market Share, Customer Loyalty, Innovation + R&D, Product Differentiation, Logistics/production expertise, Channel Relationship, Strategic Alliance, Marketing Expertise, Strong capital, Big data access and Patents, software

Decide weights: let us take into account the factors including Brand equity, Market Share, Customer Loyalty, Innovation + R&D, Product Differentiation, Logistics/production expertise, Channel Relationship, Strategic Alliance, Marketing Expertise, Strong capital, Big data access and Patents, software

we need to determine the weight of each factor, that is how important each factor is – on a scale from 1 (not important) to 10 (very important) (very important).

Say, the most significant factor is Brand equity, so give it 4 out of 10. Give 2 out of 10 to Customer Loyalty and 1.5 out of 10 to Logistics/ Production expertise , 1 out of 10 to the factors including Channel and Strong Capital and 0.5 out of 10 to Innovation + R&D (the weights must add up to 10)

Rate the factors: Now as above, each factor is scored on a scale of 1 (not important) to 10 for each business unit (very important factor).

As Logistics is the most important factor for Fashion and gets 6 out of 10. Distribution Channel gets 5 out of 10, Customer Loyalty Strong Capital gets 3 each and Innovation + R&D gets 1 for Fashion.

For Supermarkets, Logistics and Distribution Channel gets 10 as they are an important factor supporting the growth of the business unit, Strong Capital gets 9 out of 10, Brand equity gets a score of 7, Market Share 5, and Customer Loyalty 8, strong capital gets 9 and Innovation + R&D gets 6 out of 10 (the ratings need not add up to 10)

Similarly, each factor is scored for the other business units such as Online Store, Sam’s Club and Electronics Store.

For Online Store, As Brand equity is a major factor influencing the growth of the business unit it gets a score of 9, and Logistics and Distribution Channel are the other significant factors supporting the growth of the business unit they each get a score of 9 out of 10, Innovation + R&D and Customer Loyalty gets a score of 7, Market Share 6 and strong capital gets 6 each.

For Sam’s Club, As Market Share is a critical factor influencing the growth of the business unit it gets a score of 10, and Logistics and Distribution Channel are the other significant factors supporting the growth of the business unit they each get a score of 8 out of 10, Brand equity 6, and Customer Loyalty 4, strong capital gets 5 and Innovation + R&D gets 3 out of 10.

As Market Share is a major factor supporting the growth of the business unit it gets a score of 8, and Brand equity is the other significant factor influencing the growth of the business unit it gets a score of 7 out of 10, Customer Loyalty gets 5, Distribution Channel gets 4, strong capital gets 3 and Innovation + R&D gets 2 out of 10.

Weighted score: We multiply the weight for the factor by the rate for the unit in order to get the weighted score for each factor of competitive strength for each unit. For all the business units, below are the weighted scores for

Fashion: Brand equity 4×7= 28, Market Share = 1×5 = 5, Customer Loyalty = 2×8 = 16, Innovation + R&D = 0.5×3 = 1.5, Logistics/production expertise =1.5 x 10 = 5, Channel Relationship 1×10 = 10 and Strong capital 1×9 = 9. Total weighted score for Fashion = 28 + 5 + 16 + 1.5 +5 + 10 + 9= 41.5.

Supermarkets: Brand equity 4 x 4 = 16, Market Share = 1×2 = 2, Customer Loyalty = 2×3 = 6, Innovation + R&D = 0.5×1 = 0.5, Logistics/production expertise =1.5 x 6 = 9, Channel Relationship 1×5 = 5 and Strong capital 1×3 = 3. Total weighted score for Supermarkets = 28+5+16+3+15+10+9 = 77.

Online Store: Brand equity 4×9 = 36, Market Share = 1×6 = 6, Customer Loyalty = 2×7 = 14, Innovation + R&D = 0.5×7 = 3.5, Logistics/production expertise =1.5 x 8 = 12, Channel Relationship 1×8 = 8 and Strong capital 1×6 = 6. Total weighted score for Online Store = 36+6+14+3.5+12+8+6 = 79.5.

Sam’s Club: Brand equity 4×6= 24, Market Share = 1×10 = 10, Customer Loyalty = 2×4 = 8, Innovation + R&D = 0.5×3 = 1.5, Logistics/production expertise =1.5 x 8 = 12, Channel Relationship 1×8 = 8 and Strong capital 1×5 = 5. Total weighted score for Sam’s Club = 24+10+8+1.5+12+8+5 = 63.5.

Electronics: Brand equity 4×7 = 28, Market Share = 1×8 = 8, Customer Loyalty = 2×5 = 10, Innovation + R&D = 0.5×2 = 1, Logistics/production expertise =1.5 x 2 = 3, Channel Relationship 1×4 = 4 and Strong capital 1×3 = 3. Total weighted score for Electronics = 28+8+10+1+3+4+3 = 54.

Step 2: Rate the market attractiveness factors

List the factors: To determine industry attractiveness, the following are among factors taken into consideration: the industry growth rate, market size, industry profitability, low competition, and PEST factors.

Decide weights: To keep it simple, let’s take only the factors that make an industry attractive to investments including Market size, Profit margins, Market growth rate, Competitive rivalry, Threat of competition, Threat of disruption, Capital cost to enter, Tech. / R&D costs, Innovation required, Channel partners, Macroeconomics and Govt. Regulation.

We must now determine the weight of each factor i.e. how important each factor is by giving it points from 1 (not important) to 10 (not important) (very important).

All of the weights should have a total of 10. Let us presume that the most important of the factors is profit margin; if so, give it a weight of, say, 3 out of 10.

Give 2 out of 10 to and market growth rate, 1 out of 10 to each of Market Size, Competitive rivalry, Threat of competition and Threat of disruption.

Finally Give 0.5 out of 10 to each of Capital cost to enter and Channel partners as these have minimal effects of Market Attractiveness.

So, this means that the most important factor in entering the market is the prospect of making a high profit, accompanied by market growth and low competition.

Rate the factors: Each factor is now scored on a scale of 1 (not attractive) to 10 for each business unit (very attractive).

For Fashion, the most attractive factor is Capital cost to enter. If so, it is put at 8 on the scale. Profit margins, Channel partners and Competitive rivalry each gets 3 out of 10, Market size and Threat of competition gets 2, Market growth rate and Threat of disruption is scored with 1.

As Market size and Channel Partners are the attractive factor for Supermarkets it gets a score of 10. Capital cost to enter gets a score of 8. Profit margins and Market growth gets a score of 6 out of 10. Threat of disruption gets a score of 5, Competitive rivalry gets 4 out of 10, Threat of competition gets 3.

For Online Store, the most attractive factor is Market Size, it is put at 8 on the scale. Profit margins gets 7 out of 10, Channel partners and Capital cost to enter each gets 5 out of 10, Threat of competition and Threat of disruption gets 4, Market growth rate and Competitive Rivalry is scored with 3.

As Profit Margins and Market Growth Rate are the attractive factor for Sam’s Club it gets a score of 10. Capital cost to enter gets a score of 7 out of 10, Market Size, Competitive rivalry and Channel Partner gets a score of 6.

For Electronics, the most attractive factor is Market growth rate, it is put at 9 on the scale. , Threat of disruption gets 8 out of 10, Profit margins gets 7 out of 10, Competitive Rivalry is scored with 6, Channel partners, Threat of competition and Capital cost to enter each gets 5 out of 10, and Market Size gets 4,

Weighted score: To get the weighted score for each factor of industry attractiveness, we multiply the weight of the factor by the rate for the unit. Here are the weighted scores for all the business units.

Fashion: Market size 1 (Weight) x 2 (rate) = 2, Profit margins 3×3 = 9, Market growth rate 2×1 = 2, Competitive rivalry 1×3 = 3, Threat of competition 1×2 =2, Threat of disruption 1×1 = 1, Capital cost to enter 0.5×8 = 4, Channel partners 0.5×3 = 1.5. Total weighted score for Fashion = 2 + 9 + 2 + 3 +2 + 1 + 4 +1.5 = 23.

Supermarkets: Market size 1×10 = 10, Profit margins 3×6 = 18, Market growth rate 2×6 = 12, Competitive rivalry 1×4 = 4, Threat of competition 1×3 =3, Threat of disruption 1×5 = 5, Capital cost to enter 0.5×8 = 4, Channel partners 0.5×10 = 5. Total weighted score for Supermarkets = 10+18+12+4+3+5+4+5 = 56

Online Store: Market size 1×8 = 8, Profit margins 3×7 = 21, Market growth rate 2×3 = 6, Competitive rivalry 1×3 = 3, Threat of competition 1×4 =4, Threat of disruption 1×4 = 4, Capital cost to enter 0.5×5 = 2.5, Channel partners 0.5×5 = 2.5. Total weighted score for Online Store = 8+21+6+3+4+4+2.5+2.5 = 48.5

Sam’s Club: Market size 1×6 = 6, Profit margins 3×10= 30, Market growth rate 2×10 = 20, Competitive rivalry 1×8 = 8, Threat of competition 1×6 =6, Threat of disruption 1×6 = 6, Capital cost to enter 0.5×7 = 3.5, Channel partners 0.5×8 = 4. Total weighted score for Sam’s Club = 6+30+20+8+6+6+3.5+4 = 83.5

Electronics: Market size 1 x 4 = 4, Profit margins 3×7 = 21, Market growth rate 2×9 = 18, Competitive rivalry 1×6 = 6, Threat of competition 1×5 =5, Threat of disruption 1×8 = 8, Capital cost to enter 0.5×5 = 2.5, Channel partners 0.5×5 = 2.5. Total weighted score for Electronics = 64+21+18+6+5+8+2.5+2.5 = 64.5.

Step 3: Plot the business units on a matrix

We can plot the units on the matrix once we have the weighted scores of the units. In this example, Sam’s Club, Supermarkets, Online Store, Fashion and Electronics Stores score 23,56,48.5,83.5 and 64.5 in market attractiveness, and 41.5,77,79.5,63.5 and 54 in unit strength respectively.

Each unit is represented by a circle with its size indicating the market size of the unit. On the circle representing the market share, a pie chart may also be seen.

In general, units that are above the matrix diagonal will be candidates for additional investments and candidates for divestment below them.

In the “hold” group, units that fall on or around the diagonal are normally positioned. It is also possible to have a dimension showing the outlook for the units, and it is discussed in Step 5.

Step 4: Analysis of Information

In this example, the following inference is obtained

Invest/Grow: Sam’s Club and Supermarkets

Selectivity/Earnings: Online Store

Harvest/Divest: Fashion and Electronics Stores

Step 5: Identify future direction of each unit

With no hint of the future and where things should be directed, the matrix itself just helps a business assess the current state of the market and competitive power. The company may be able to assess the possible path the future will take with the aid of a market analyst. Is the market going to get more or less appealing, or will it remain the same? Competitive strength can rise or decrease. With this knowledge, if the potential in any field is expected to increase or decrease, the measures to be taken may be dramatically altered. Within the matrix, an arrow is added to each circle, showing its future direction.

Online Store: It is expected the industry to become more attractive and the competitive strength of this SBU to improve.

Sam’s Club: It is expected the industry to become less attractive and the competitive position of this SBU to decline over time.

Fashion: It is expected the industry to become more attractive and the competitive strength of this SBU to improve.

Supermarkets: It is expected the industry attractiveness and competitive strength to remain broadly the same.

Electronics Stores: It is expected the industry to remain as attractive as it is currently, but It is expected the business unit strength to improve.

Step 6: Prioritize Investments

Look at our example again. It seemed at first as if company 2 was one to spend it. But, looking at the projected future position, you can see that we expect this industry’s attractiveness to dramatically decrease over time. It is also expected that our competitive position will shrink over time. Therefore, the organisation transitions from one in which to invest to one in which to consider harvesting.

The matrix makes it clear that more investments are warranted by some SBUs than others, but that does not necessarily mean that money should be spent there.

For this, there are several explanations. It may be that one company doesn’t need much investment in capital to expand. Conversely, a very large investment could involve another business. The diagram also does not tell you how much to invest or which region of an SBU to invest in (marketing, R&D etc). To answer these questions, further study will be needed.

Examples of GE-McKinsey Matrix (Practical Implications in Renowned Brands)

Invest or Grow strategy of Ford electric car

Even being the most popular automakers around the world, Ford did not invest in electric cars a couple of years ago. There were two main reasons for doing so, ie:

The First Reason being in the classic car market, Ford has a good presence or core competency, but it is not there in the electric car. In terms of powertrain, engine, etc., designing and producing a hybrid vehicle like an electric car is very different from conventional cars. The components are entirely different from an electric car in which no strong experience was available to Ford.
Another reason was the market, as demand for electric cars was increasing, but conventional cars were preferred by citizens. Therefore, as the industry was not so appealing to the electric car business, it was not necessarily a booming electric car market at that time.

Ford did research to find a solution, and once they made their base strong in the electric car segment and even the market became very attractive; then Ford made an investment in it.

Divest or Harvest strategy by Microsoft in Zune mp3 player

Microsoft launched its mp3 player, i.e. Zune. A year later, after Apple released the iPhone, Mp3 players began to leave the market. The emerging and new demand for smartphones led to the completely unimportant development of mp3 players. People have started using phones.

To get rid of this, Microsoft discontinued the Zune line of mp3 players. For the company, it was the right decision because they had no good presence in the mp3 player market or industry and could not succeed in this. After Apple introduced the mobile, the mp3-player industry also lost its appeal.

GE-McKinsey Matrix tips

To perform a GE-McKinsey analysis, some valuable tips are:

Collaborate-there would be a better result for a study with multiple viewpoints.
Using the skills and resources inside the organization that are already available.
Along with other approaches, such as SWOT analysis, Porter’s Five Powers, competitor analysis, or scenario preparation, use GE-McKinsey Matrix.
To track changes in the market climate, integrate the study into an ongoing process.
Try not to get bogged down by gathering large quantities of quantitative information without adequately evaluating and interpreting the data.
Don’t leap to the past or present-based conclusions about the future.

Advantages and Disadvantages of GE-McKinsey Matrix

Advantages:

There are many advantages of the GE-McKinsey Matrix, including:

This matrix takes into account a number of factors that the BCG Matrix does not.
It is visually easy to understand and offers more options to position a product as opposed to the BCG Matrix, due to the inclusion of the “low level on both axes.
It is conceptually similar to the BCG Matrix, so someone familiar with the BCG Matrix will easily use the GE-McKinsey Matrix.

Disadvantages:

Some Disadvantages of the GE-McKinsey Matrix include the following:

This matrix does not take into account synergies between different products. Discontinuation of one can adversely affect another.
The scoring of the different factors using the weights is arbitrary and leaves the method vulnerable to bias.
It does not help to assign relative investments for each product.