GE-McKinsey Matrix
Updated 2026-08-09
INTRODUCTION
English translation pending.
CORE DEFINITION
The GE-McKinsey Matrix is a business portfolio analysis tool developed by General Electric with McKinsey and Company in the 1970s. The vertical axis is industry attractiveness, built from factors such as market size, growth rate, profitability, and competitive intensity. The horizontal axis is competitive strength, built from market share, brand strength, production capability, and technology. Each axis is scored from low to high and divided into three bands, producing nine cells grouped into invest and grow, selectively invest, and harvest or divest. Its advance over the BCG matrix is that both axes are composites of multiple weighted factors rather than single measures.
SCAFFOLDING EFFECT
Reduce cognitive load
- Use factor weighting: build each axis from several weighted factors rather than one headline measure. - Use cell placement: position each unit in the grid and read the recommendation from its cell. - Use resource shift: move funding from low-attractiveness low-strength units toward the top-right cells.
Anchor fast decisions
A portfolio decision requires comparing businesses that differ in both environment and capability, and a single measure per axis cannot capture that. Composite scoring forces the analyst to make explicit which factors matter and how much, which surfaces disagreements that a one-number ranking hides. Placing units in the grid then groups them into strategies with different resource implications, so capital allocation follows from the analysis rather than from the loudest advocate. Because the scores are judgments, the tool's value depends on weighting discipline rather than on the grid itself.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/GE_multifactorial_analysisverified
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