McKinseys GE-Matrix

The strategic planning tool GE Matrix by McKinsey & Company is a development of the management consultancy McKinsey. It helps companies to evaluate their business areas on the basis of two dimensions: Competitive position and market growth. The matrix divides the business areas into four categories: stars, cash cows, question marks and dogs. Companies can use this categorization to make strategic decisions about how to most effectively deploy their resources and optimize their business unit.

How does McKinsey's GE Matrix work?

When applying McKinsey's GE Matrix, business units are evaluated based on their market growth and competitive position. Stars are business units that have a strong market position in fast-growing markets. Business units with a high market share position in saturated markets are referred to as cash cows. Question marks have a low market share position in fast-growing markets and are business units. Dogs have a low market share position in saturated markets. Based on this classification, companies can decide which business units they want to invest in, keep, give up or abandon.

Advantages of McKinsey's GE matrix

McKinsey's GE Matrix provides companies with a structured method for analyzing their product portfolio and prioritizing investments. Thanks to the clear categorization, companies can quickly identify which business areas have the greatest growth potential and which areas may need to be reconsidered. The matrix helps companies to use their resources more efficiently and make informed strategic decisions based on data.

The application of McKinsey's GE Matrix in business practice

Many companies around the world use the McKinsey GE Matrix to improve their business strategy. By using the matrix consistently, companies can continually review and adjust their portfolio of business units to meet changing market conditions. The GE Matrix helps companies achieve long-term competitive advantage and drive growth. It allows companies to focus their resources on the areas that have the greatest potential and promise long-term success.