G. E. multi factoral analysis
From Wikipedia, the free encyclopedia
The GE matrix is a technique used in brand marketing and product management to help a company decide what product(s) to add to its product portfolio. It is conceptually similar to the Boston Box, but more complicated, in that more factors are considered, and many of the assessments tend to be based on human judgements, rather than cold quantitative facts.
As with the Boston Box, a two-dimensional grid is created, on which the products, businesses or markets will be located. In the case of the GE matrix, multiple factors are used to compute the score on each of the two dimensions. In one version of the matrix:
- one dimension comprises nine industry attractiveness measures, and
- the other comprises twelve business strength measures.
Each product, brand, service, or potential product is mapped onto this industry attractiveness/business strength space.
The GE multi-factor model was first developed by General Electric in the 1970s. It has the advantage over the Boston Box that it takes into account more than just market growth and relative market share. Ideally each business or product would be located in a multi-dimensional space, but since the human mind cannot visualise more than three dimensions, the compromise is to reduce the scores down to just two dimensions.
Some organisations mistakenly believe they have too much flexibility in which factors they use. One company (which shall remain nameless) uses just market growth rate for industry attractiveness and just company revenue for business strength.
[edit] See also
product management, product portfolio, marketing, B.C.G. analysis
[edit] External links
- A 3 by 3 GE Portfolio MatrixGood pictorial description of a nine-cell GE Matrix into five areas of overall business attractiveness: high, medium-high, medium, medium-low, and low.
