McKinsey Matrix

Posted June 30th, 2010 by lake

Screen Business General Electric, since it was developed to assess the business portfolio of the U.S. conglomerate, which by then had about 150 units of strategic analysis (UEA). General Electric, too UEA then had to have clear strategic focus of each of them, so asked McKinsey to help set your business portfolio and decide which to invest, which stay and which to liquidate. There are several variations on the McKinsey Matrix, and each one tends to sort the lines of different ways, but always it is a matrix of 9 cells, with one axis representing the attractiveness of the market (low / medium / high) and the other the strength of a business unit (low / medium / high). The horizontal axis usually measured the competitive position of Strategic Analysis Unit, while the coordinate axis measures the profitability of the UEA.In its 9-cell is positioned different pie graphs with a variable size. Each of them represents a Strategic Analysis Unit in the portfolio of businesses. On the one hand the size of the circle represents the size of the market (the larger the market, the greater the circle), and on the other hand, the circle turns into a pie chart which represent the market share of the company in the UEA. The analysis is complemented at times with arrows coming out of the pie CFATF, indicating the expected future evolution of the UEA. McKinsey Matrix complements and enhances the Boston Consulting Group, and nearly thirty years after its invention, it remains one of the most widely used strategic tools in identifying and assessing all the activities of a company.

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