GE-McKinsey Matrix
The GE-McKinsey Matrix scores each business unit on how attractive its market is and how strong your position is in it, so investment goes where both are working in your favour.
Nine boxes sit in a three-by-three grid, market attractiveness up one side and competitive strength along the other.
Reach for this when…
- You run more than two or three product lines and can't fund all of them properly.
- The BCG Matrix feels too crude because market share alone misses half the picture.
- You need to defend an investment decision to a board with more than a gut feel.
How to run it
- List the business units or product lines to be scored.
- Score each on industry attractiveness: growth, size, competitive intensity, margins available.
- Score each on competitive strength: your share, brand, cost position, capabilities.
- Plot each unit and read its zone: invest to grow, selective investment, or harvest and divest.
- Size each unit's circle on the plot by its current revenue, so scale is visible alongside position.
A worked example
Situation. Nikola Jovanovic ran Jovanovic Kucni Aparati, a mid-size manufacturer outside Belgrade, Serbia, spread across five product categories on one shared factory floor.
Applied. Scored properly, water heaters sat high on both attractiveness and strength, ceiling fans were strong but in a flat market, and the new smart-plug range was attractive but Nikola's brand had no real strength there yet.
Result. He backed water heaters hard, kept fans on maintenance funding only, and put the smart-plug range through one more strength-building quarter before deciding whether to fund it properly or drop it.
The catch
The scores are built from weighted criteria you choose yourself, so two honest teams can score the same unit differently and both defend it. The nine cells sit in three loose zones - invest, selective, harvest - so treat the boundaries as fuzzy, not fixed lines.
If nobody can say why a criterion got the weight it did, the matrix is dressing up an opinion as data.
Origin: General Electric; McKinsey & Company