GEC MODEL

INTRODUCTION TO GEC MODEL

•General electric or GE is a multinational conglomeration organization
that originated in the united states.
•It is incorporated in new york and the headquarters are based in
Fairfield, Connecticut.
•The company operates in several areas including energy, technology
infrastructure, capital finance and products in the consumer and
industrial category.
•The company was created by Thomas Edison, the inventor of the light
bulb. the company is often considered the most successful
conglomerate in the world.
• The basis for this is that it reached its conglomerate status before this
became a common practice for companies. Since its inception, the
company has continued to grow, expand and innovate in a variety of
industries and fields including things that range from electric fans to
airplanes.
• The company was ranked the 26th largest company and the 14th most
profitable one in America in 2011. This was based on gross revenue but
another list ranked the company 4th among the Forbes Global 2000 by
considering more detailed metrics.
• It has also been listed as the 7th best company for leaders and 15th most
admired company by Fortune in 2011/2012, number 5 for best global
brand by Inter brand, and by Fast Company as the 19 th most innovative
company.
 MEANING OF GE MATRIX
• The GE matrix attempts to improve upon the BCG matrix
in the following two ways: –

• The GE matrix generalizes the axes as "Industry

Attractiveness" and "Business Unit Strength" whereas, the
BCG matrix uses the market growth rate as a proxy for
industry attractiveness and relative market shares.
EXPLANATION OF GEC MODEL
 TOOLS AND TECHNIQUES FOR STRATEGIC ANALYSIS FOR GEC MODEL

Business Strength

   Strong  Medium Weak 

Market Attractiveness

High    Protect Position Invest to build  Build Selectively 

Selective/Manage for Limited expansion or

 Medium Build Selectively 
earnings  harvest 

 Low  Protect and Refocus  Manage for earnings Divest 

 ADVANTAGES OF GEC MODEL
• Helps to prioritize the limited resources.
• Provides awareness on performance.
• More sophisticated business portfolio framework.
• Identifies the strategic steps.
• This matrix takes into account a number of factors that the BCG matrix does not.
• It is easy to understand and provides more options to place a product as compared to BCG matrix.
• It is conceptually similar to BCG matrix, so anyone who is familiar with the BCG matrix can easily
use the GEC Matrix.
 DISADVANTAGES OF GEC MODEL

•Needs a consultant or an expert to determine industry’s attractiveness

and business unit strength as accurately as possible.

•It is expensive to conduct.

•It doesn’t take into account the harmony that could exist between two or

more business units.

•It can get quite complicated and cumbersome with the increase in

businesses.
•It cannot successfully portray the position of new business units in

emerging business.
COMPARISON BETWEEN BCG AND GE MATRIX
BCG MATRIX
● BCG matrix is a growth
share model, representing
growth of business &
market share enjoyed by
the firm.
● Four cells.
● Market share & market
growth
● To help companies deploy
their resources among
various business units
● Single measure is used
● Classified into two degrees
GE MATRIX
● Implies multifactor portfolio
matrix, that assist firm
making strategic choices for
product lines based on their
position in the grid
● Nine cells
● Industry attractiveness &
business strengths
● To prioritize among various
business units
● Multiple measure are used
● Classified into three degrees
 CONCLUSION
• The GEC model has been proven over the years to be a useful tool in order to assess the strength
of a company’s portfolio of products relative to the attractiveness of the market they inhabit.

• It can be used both internally as a strategy tool and externally as a competitive intelligence
technique, with their strength lying in their ease of use and interpretation.

• Despite these strengths, users must be aware of their limitations and would be wise to use them
primarily as an overview or as a complement to other analytical techniques.