Difference Between BCG and GE Matrices

BCG matrix is used by the companies to deploy their resources among various business units. On the contrary, firms use GE matrix to prioritize investment among various business units. In BCG matrix only a single measure is used, whereas in GE matrix multiple measures are used.

1. Why GE matrix is better than BCG matrix?
2. What is GE matrix with example?
3. What does the GE Matrix show?
4. What is GE 9 cell matrix?
5. How GE matrix is superior than BCG model?
6. How do you calculate GE Matrix?
7. What is BCG matrix example?
8. What are the limitations of the GE McKinsey grid?
9. How do you calculate industry attractiveness?
10. What do cash cows symbolize in BCG matrix?
11. What does Star symbolize in BCG matrix?
12. What is meant by SBU?

Why GE matrix is better than BCG matrix?

The main advantage of the GE Matrix as a strategy tool is, of course, that it tries to answer the question of where scarce resources should be invested. It is more refined than the BCG Matrix as it replaces a single factor, “market growth,” with many factors under “market attractiveness.”

What is GE matrix with example?

The GE McKinsey Matrix, also know as the McKinsey Nine Box Matrix is a strategic tool used for business portfolio planning. A business portfolio is a group of businesses that collectively make up a company. ... As an example of a business portfolio, consider Hilton Hotels.

What does the GE Matrix show?

The GE matrix helps a strategic business unit evaluate its overall strength. ... Each product, brand, service, or potential product is mapped in this industry attractiveness/business strength space. The GE multi factorial was first developed by McKinsey for General Electric in the 1970s.

What is GE 9 cell matrix?

The GE matrix was developed by Mckinsey and Company consultancy group in the 1970s. The nine cell grid measures business unit strength against industry attractiveness and this is the key difference. Whereas BCG is limited to products, business units can be products, whole product lines, a service or even a brand.

How GE matrix is superior than BCG model?

BCG matrix is used by the companies to deploy their resources among various business units. On the contrary, firms use GE matrix to prioritize investment among various business units. In BCG matrix only a single measure is used, whereas in GE matrix multiple measures are used.

How do you calculate GE Matrix?

HOW TO APPLY THE MATRIX TO YOUR BUSINESS

1. Step 1: Determine Industry Attractiveness of Different Business Units. ...
2. Step 2: Determine the Competitive Strength of each Business Unit. ...
3. Step 3: Plot the business units on a matrix. ...
4. Step 4: Analysis of Information. ...
5. Step 5: Identify future direction of each unit.

What is BCG matrix example?

A perfect example to demonstrate BCG matrix could be the BCG matrix of Pepsico. ... Cash Cows – With a market share of 58.8% in the US, Frito Lay is the biggest cash cow for Pepsico. Stars – Even though Pepsi's share in the market has been reduced to 8.4%, it's still the star for Pepsico because of its brand equity.

What are the limitations of the GE McKinsey grid?

Disadvantages:

• This matrix does not take into account the synergies between various products. Discontinuing one might adversely impact another.
• The scoring of the various factors using the weights is subjective and leaves the tool open to bias.
• It does not help in allocating the relative investments for each product.

How do you calculate industry attractiveness?

In order to determine the attractiveness of an industry, it is important to work with business brokers to analyze the 5 forces of the industry: buyers, suppliers, substitutes, rivals, and the threat of new entrants. The 5 forces analysis is an industry-level analysis and does not focus on individual companies.

What do cash cows symbolize in BCG matrix?

Cash Cows symbolize Stable in BCG matrix. Cash cows are the leaders in the marketplace and generate more cash than they consume. These are business units or products that have a high market share but low growth prospects.

What does Star symbolize in BCG matrix?

The horizontal axis of the BCG Matrix represents the amount of market share of a product and its strength in the particular market. ... Stars: Products with high market growth and a high market share. Dogs: Products with low market growth and a low market share.

What is meant by SBU?

Definition: A strategic business unit, popularly known as SBU, is a fully-functional unit of a business that has its own vision and direction. Typically, a strategic business unit operates as a separate unit, but it is also an important part of the company.