GE MATRIX

Submitted By:-Snehalata MagarPavithra PowarAvinash Kumar

Submitted To :Priya Ramachandran

BCG Matrix

BCG MATRIX It is developed by Boston consultancy group in

1972.It is also known as growth share matrix. STAR-Needs a good deal of investment support as it

operates in a high growth market. They are at a peak of product life cycle, and star indicates a great potential for future.

Mark-in this the future is uncertain, they are in high risk zone

Cash cow-Cows are generators of resources, it brings a lot of cash. Does not require investment as it is in low growth market.

Dog-They are in low growth market and low market share. They actually blocks capital of the company.

Advantages Of BCG

Model is simple and easy to understand.

BCG is applicable to large companies that seek volume and experience effects.

BCG Model is helpful for managers to evaluate balance in the firms current portfolio.

Limitations

High market share is not the only success factor

Market growth is not the only indicator for attractiveness of a market

Sometimes Dogs can earn even more cash as Cash Cows

Firms with small market share can be highly profitable.

General Electric (GE) Matrix

Developed by McKinsey & Company in 1970’s.Also known as Spotlight Matrix.

GE is a model to perform business portfolio analysis on the SBU’s.

GE is rated in terms of ‘Market Attractiveness & Business Strength’

It is an Enlarged & Sophisticated version of BCG.

ABOUT GE MATRIX

It is the management task concerned with the growth and future of business enterprise.

It provides the route map for the firm and helps to take decision in the future with a greater awareness.

STRATEGIC PLANNING

GE Nine-cell Planning Grid:- M

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Strong Medium Weak

Lo

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Hig

hBusiness Strength

GE nine-cell Planning Grid:-Zone

Strategic SignalGreen

Yellow

Red

Invest/Expand

Select/Earn

Harvest/Divest

GE Nine-cell Planning Grid:- Invest/ Expand: In this Zone there is opportunity

to Grow through further Investment & Expansion. This zone is characterized by high business strength & high industry attractiveness which is a Ideal situation for growth. How ever this situation does not remain for a long time.

Example: Initially IT industry most attractive but later on it was facing competition from all sorts of place.

Select/Earn : This zone presents a mix situation in which growth possibility is low. However its presents a opportunities for selective earning.

Harvest/Dives: In the case of red-cell organization has to stop. In this case Harvesting or Divesting strategies suitable. Harvesting means withdraw from a business but withdrawal is not immediate. Initially focus is on cost-cutting i.e In R&D and advertising, the objective is to earn short term profit.

Market Attractiveness

Annual market growth rate

Overall market size Historical profit margin Current size of market Market structure Market rivalry Demand variability Global opportunities

Current market share Brand image Production capacity Corporate image Profit margins relative to competitors R & D performance Promotional effectiveness

Business Strength

Study of TATA

TATA

• IT (Information Technology) : TCS

• Consumer Durable : Automobiles, Titan etc.

•Textiles : Tata Fabrics, West Sides etc

GE Matrix For TATA

Business Strengths

Mar

ket

A

ttra

ctiv

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Low

High

WeakStrong

IT Consumer Durables

Textiles

BCG & GE Matrix

Mar

ket

Att

ract

iven

ess

Business Strength

Mar

ket

Gro

wth

Relative Position

(Market Share)

BCG v/s GE

BCG GE

Market Growth

Market share

4 cell

Multi Products

Primary tools

Market Attractiveness

Market strength

9 cell

Multi Business Units

Secondary tools

THANKING YOU