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    GE McKinsey 9 Box

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    prashantpaper
    The GE-McKinsey nine-box matrix is a framework developed in the 1970s to help multibusiness corporations systematically prioritize investments among their business units. It evaluates each unit based on the attractiveness of its industry and the unit's competitive strength within that industry, placing them in a 3x3 box matrix. Units above the diagonal may warrant investment and growth strategies, those on the diagonal selective investment, and those below the diagonal are candidates for sale, liquidation or running for cash. Though simple, judgment is still needed to weigh trade-offs as industry and competitive assessments have become more sophisticated over time. The nine-box matrix influenced later portfolio models and remains widely used today.

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    GE McKinsey 9 Box

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    prashantpaper
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    The GE-McKinsey nine-box matrix is a framework developed in the 1970s to help multibusiness corporations systematically prioritize investments among their business units. It evaluates each unit based on the attractiveness of its industry and the unit's competitive strength within that industry, placing them in a 3x3 box matrix. Units above the diagonal may warrant investment and growth strategies, those on the diagonal selective investment, and those below the diagonal are candidates for sale, liquidation or running for cash. Though simple, judgment is still needed to weigh trade-offs as industry and competitive assessments have become more sophisticated over time. The nine-box matrix influenced later portfolio models and remains widely used today.

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    Article and link from McKinsey quarterly on corporate diversification

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    The GE-McKinsey nine-box matrix is a framework developed in the 1970s to help multibusiness corporations systematically prioritize investments among their business units. It evaluates each unit based on the attractiveness of its industry and the unit's competitive strength within that industry, placing them in a 3x3 box matrix. Units above the diagonal may warrant investment and growth strategies, those on the diagonal selective investment, and those below the diagonal are candidates for sale, liquidation or running for cash. Though simple, judgment is still needed to weigh trade-offs as industry and competitive assessments have become more sophisticated over time. The nine-box matrix influenced later portfolio models and remains widely used today.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    385 views2 pages

    GE McKinsey 9 Box

    Uploaded by

    prashantpaper
    The GE-McKinsey nine-box matrix is a framework developed in the 1970s to help multibusiness corporations systematically prioritize investments among their business units. It evaluates each unit based on the attractiveness of its industry and the unit's competitive strength within that industry, placing them in a 3x3 box matrix. Units above the diagonal may warrant investment and growth strategies, those on the diagonal selective investment, and those below the diagonal are candidates for sale, liquidation or running for cash. Though simple, judgment is still needed to weigh trade-offs as industry and competitive assessments have become more sophisticated over time. The nine-box matrix influenced later portfolio models and remains widely used today.

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    © All Rights Reserved
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    http://www.mckinseyquarterly.

    com/Strategy/Strategic_Thinking/Enduring_ideas_The_GEMcKinsey_nine-box_matrix_2198
    12 September 2008

    Enduring ideas: The GEMcKinsey nine-box matrix


    In one of a series of interactive presentations, McKinsey alumnus Kevin Coyne describes the GE
    McKinsey nine-box matrix, a framework that offers a systematic approach for the multibusiness
    corporation to prioritize its investments among its business units.
    September 2008
    With the rise of multibusiness enterprises in the 20th century, companies began to struggle with
    managing a number of business units profitably. In response, management thinkers developed
    frameworks to address this new complexity. One that arose in the early 1970s was the GE
    McKinsey nine-box framework, following on the heels of the Boston Consulting Groups wellknown growth share matrix.
    The nine-box matrix offers a systematic approach for the decentralized corporation to determine
    where best to invest its cash. Rather than rely on each business unit's projections of its future
    prospects, the company can judge a unit by two factors that will determine whether it's going to
    do well in the future: the attractiveness of the relevant industry and the units competitive
    strength within that industry.
    Placement of business units within the matrix provides an analytic map for managing them. With
    units above the diagonal, a company may pursue strategies of investment and growth; those
    along the diagonal may be candidates for selective investment; those below the diagonal might
    be best sold, liquidated, or run purely for cash. Sorting units into these three categories is an
    essential starting point for the analysis, but judgment is required to weigh the trade-offs
    involved. For example, a strong unit in a weak industry is in a very different situation than a
    weak unit in a highly attractive industry.
    The nine-box matrix is the forerunner of a number of portfolio models, including MACS 1 and the
    portfolio of initiatives.2 The criteria for assessing industry attractiveness and competitive strength
    have grown more sophisticated over the years. To this day, most large companies with a formal
    approach to modeling their businesses refer to the nine-box matrix or some descendant of it.

    In one of a series of interactive presentations, McKinsey alumnus Kevin Coyne describes the
    GEMcKinsey nine-box matrix, a framework that offers a systematic approach for the
    multibusiness corporation to prioritize its investments among its business units. Click here
    to explore this framework in a new window.
    Notes
    Market-activated corporate strategy; see Frederick W. Gluck, Stephen P. Kaufman, A.
    Steven Walleck, Ken McLeod, and John Stuckey, Thinking strategically,
    mckinseyquarterly.com, June 2000.
    1

    See Lowell L. Bryan, Just-in-time strategy for a turbulent world, mckinseyquarterly.com,


    June 2002.
    2

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