The GE-McKinsey Matrix

Determining Investment Priorities

Identify where you want to focus your investment.

© iStockphoto/Norebbo

If you had endless amounts of money and time, there would probably be no need to figure out how best to allocate your resources.

But, in reality, we all have to prioritize our investments – particularly in difficult economic conditions.

When faced with this challenge in your organization, how do you decide which product groups to continue, which market segments to focus on, or which business units to sell? To make that decision, you must first understand your business portfolio – and you start by determining the benchmarks to define your portfolio.

In the 1970s, the Boston Consulting Group (BCG) developed the Boston Matrix  , which uses market growth and market share as a way of screening opportunities, so that organizations can choose the ones that are likely to give the best results. In the BCG 2x2 Matrix, the more of each dimension your product line has, the more attractive it is – and, therefore, the more you should invest in it.

General Electric (GE) liked the visual part of BCG's matrix, but not the dimensions. GE therefore asked its consulting firm, McKinsey & Company, to create a model that better suited GE's needs. The result was the 3x3 GE-McKinsey Matrix (also called the McKinsey Matrix, the Business Strength Matrix, or the Nine-Box Matrix) shown in Figure 1 below.

... for the complete article:

Mind Tools Club members, click here.

Join the Mind Tools Club to finish this article AND get 1,000 more resources

Join now for just $1, first month

"When I started using Mind Tools, I was not in a supervisory position. Now I am. Along with that came a 12% increase in salary." – Pat Degan, Houston, USA
Add this article to My Learning Plan

Where to go from here:

Join the Mind Tools Club

Click to join Mind Tools
Printer-friendly version
Return to the top of the page

Create a Login to Save Your Learning Plan

This ensures that you don’t lose your plan.


Connect with…

Or create a Mind Tools login. Existing user? Log in here.
Log in with your existing Mind Tools details
Lost Username or Password
You are now logged in…

Lost username or password?

Please enter your username or email address and we'll send you a reminder.

Thank You!

Your log in details have been sent to the email account you registered with. Please check your email to reset your login details.

Create a Mind Tools Login
Your plan has been created.

While you're here, subscribe to our FREE newsletter?

Learn a new career skill every week, and get our Personal Development Plan workbook (worth $19.99) when you subscribe.


Thank You!

Please check your Inbox, and click on the link in the email from us. We can then send you the newsletter.