An entrepreneur would never have faced any problem if she had immense resource of time and money. However, in reality that is not the case. Thus, she has to think hard when allocating the resources. In this article we will discuss about the GE-McKinsey Matrix and learn about the strategy tools that can help in determining which market segment should the company focus on. The Matrix also helps to realize which business units need to be sold and which should be continued with.
Origin of GE-McKinsey Matrix
The 1970s saw the introduction of the Boston Matrix which was developed by the Boston Consulting Group (BCG). The matrix used market share and market growth to screen opportunities, so that companies could choose the business units they wanted to keep and the ones they wanted to remove from the market.
When GE (General Electric) saw BCG matrix, it liked the visual section, but not the dimensions. GE asked McKinsey & Company to create a model that suits the requirements of the former. As a result, the GE-McKinsey Matrix or McKinsey Matrix was formed. It is also referred to as the Nine-Box Matrix or Business Strength Matrix