GEMcKinseyMatrix

GEMcKinseyMatrix, commonly called the GE–McKinsey matrix, is a strategic portfolio analysis framework used to help corporations allocate resources among business units and product lines. Developed by McKinsey & Company for General Electric in the 1970s, it offers a more nuanced alternative to the BCG matrix by evaluating multiple factors of attractiveness and competitive strength.

The matrix uses two dimensions: industry or market attractiveness and business unit strength. Attractiveness reflects factors such as market size, market growth, profitability, competitive intensity, and entry barriers. Strength evaluates factors like relative market share, competitive position, product quality, distribution capability, brand strength, and cost position. Each dimension is scored on a defined scale, typically three to five levels, using a weighted combination of quantitative and qualitative factors.

Units are plotted on a 3x3 grid, creating nine cells. Strategic guidance is associated with each cell: high attractiveness and high strength typically suggests invest or grow; medium cells suggest selective investment and monitoring; low attractiveness or low strength suggest harvest or divestment. The framework emphasizes prioritizing resources toward units with the strongest growth and profitability potential while configuring divestment or retrenchment for weaker assets.

Process and usage notes: the GE–McKinsey matrix relies on structured factor lists and explicit weighting, requiring reliable data and managerial judgment. It is mainly used for corporate-level portfolio planning and scenario analysis, and it requires regular updates to reflect changing market conditions and internal capabilities. Its broader factor set and judgmental elements distinguish it from more rigid models.