THE GENERAL ELECTRIC MODEL OR MARKETING

THEORIES - GE 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. You can plot these chosen units on the grid and this will help you to
determine which strategy to apply.

7/1/20XX Pitch deck title 1

INDUSTRY ATTRACTIVENESS

Factors you could choose to base this on include

 Market size
 Market growth
 Pestel factors
o Political
o Economical
o Social
o Technological
o Environmental
o Legal
 Porters five forces
o Competitive rivalry
o Buyer power
o Supplier power
o Threat of new entrants
o Threat of substitution

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BUSI NESS UNI T STRENGTH

Factors to determine how strong a unit is compared to others in its industry include

Factors to determine how strong a unit is compared to others in its industry include:
 Market share
 Growth in market share
 Brand equity
 Profit margins compared to competition
Distribution channel process

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Grow/Invest:
Units that land in this section of the grid generally have high market share and
promise high returns in the future so should be invested in.
Hold/Selectivity:
Units that land in this section of the grid can be ambiguous and should only be
invested in if there is money left over after investing in the profitable units.
Harvest/Divest:
Poor performing units in an unattractive industry end up in this section of the grid.
This should only be invested in if they can make more money than is put into
them. Otherwise they should be liquidated.

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P OR TER ’S GENER IC STR ATEGIES

Michael Porter developed his Generic Strategies in a 1985 paper entitled Competitive
Advantage: Creating and Sustaining Superior Performance. Used to both classify
company behavior and drive company behavior.

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COST LEADER SHIP STR ATEGY

The Cost Leadership Strategy is where a business focuses on reducing the cost to deliver the products or
services to a customer. This ensures you’re more profitable and thus can add shareholder value or invest in
other parts of the business strategy.

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DI FFERENTI ATION STR ATEGY

The Differentiation Strategy is where a business focuses on differentiating its products or services from
competitors. This focused strategy has a wide spectrum from full product diversity to unique product features
within a core product.

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The Cost Focus Strategy is an evolution of the Cost Leadership
Strategy.

In addition to the factors from Differentiation, you should consider the following:
 How big is the niche market you’re operating in or working towards?
 Does the market lend itself to differentiation?
 What is the size of the market vs the investment required to differentiate?
 What new features or products will make you successful?
This strategy has all the benefits of Cost Leadership while also providing additional
options:
 Becoming thought leaders within an industry
 Opening up partnerships with other companies in the same industry
 Providing a level of credibility to your overall company story
 Generate customer loyalty by becoming the single trusted provider in the industry
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The Cost Focus Strategy is an evolution of the Cost Leadership
Strategy.

In addition to the factors from Differentiation, you should consider the following:
 How big is the niche market you’re operating in or working towards?
 Does the market lend itself to differentiation?
 What is the size of the market vs the investment required to differentiate?
 What new features or products will make you successful?
This strategy has all the benefits of Differentiate while also providing additional options:
 Cross-selling between customers within markets
 Changing the market or customers by replacing products
 Innovating additional services to sell as auxiliary products

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 Treacy and Wiersema’s Value discipline strategies?
It is impossible to be good in everything and no single company can stand for
everything for their clients. It is important to offer unique value by having foresight
into demand, and that can only be done by focussing on a certain area. It must
therefore be chosen per SBU/product group for a valuating strategy. Treacy and
Wiersema’s Valuation Strategies are convenient aid for this that can also be used in
strategic marketing plan.

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Treacy and Wiersema’s Value discipline strategies?

 Product leadership

This value strategy puts the product at the centre. Here, it

is most important that your company delivers excellent
products or services to the consumer.
 Operational excellence

In this value strategy, your unique customer

processes take centre stage. You may focus, for example,
on the ease with which customers can purchase a product
or request your services.
 Customer intimacy

In this value strategy, all eyes are on the consumer. Here,

you may focus on consumer service, consumer
(experience) and a long-term relationship with your
customer.
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