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Description of the ModelThe General Electric Company, with the aid of the Boston Consulting Group and McKinsey and Company, pioneered the nine cell strategic business screen illustrated here. The circle on the matrix represents your enterprise. Both axes are divided into three segments, yielding nine cells. The nine cells are grouped into three zones:
The Green Zone consists of the three cells in the upper left corner. If your enterprise falls in this zone you are in a favorable position with relatively attractive growth opportunities. This indicates a "green light" to invest in this product/service.
The Yellow Zone consists of the three diagonal cells from the lower left to the upper right. A position in the yellow zone is viewed as having medium attractiveness. Management must therefore exercise caution when making additional investments in this product/service. The suggested strategy is to seek to maintain share rather than growing or reducing share.
The Red Zone consists of the three cells in the lower right corner. A position in the red zone is not attractive. The suggested strategy is that management should begin to make plans to exit the industry.
Characterize Your EnterpriseThe vertical axis represents the industry attractiveness. The expert system will position your enterprise on the chart based upon your description of:
bargaining power of the buyers bargaining power of the suppliers internal rivalry the threat of new entrants
the threat of substitutes
The horizontal axis represents the firm's competitive strength or ability to compete in the industry. It includes an analysis of:
the value and quality of the offering market share staying power experience
You can trace through the supporting analysis and its conclusions, adjusting your input until you are satisfied your description accurately characterizes your enterprise.
Analysis of Your Enterprise Position
High AttractivenessStrong Competitive PositionThe strategy advice for this cell is to invest for growth. Consider the following strategies:
provide maximum investment
diversify
consolidate your position to focus your resources
accept moderate near-term profits to build share
High AttractivenessAverage Competitive PositionThe strategy advice for this cell is to invest for growth. Consider the following strategies:
build selectively on strength
define the implications of challenging for market leadership
fill weaknesses to avoid vulnerability
High AttractivenessWeak Competitive PositionThe strategy advice for this cell is to opportunistically invest for earnings. However, if you can't strengthen your enterprise you should exit the market. Consider the following strategies:
ride with the market growth
seek niches or specialization
seek an opportunity to increase strength through acquisition
Medium AttractivenessStrong Competitive PositionThe strategy advice for this cell is to selectively invest for growth. Consider the following strategies:
invest heavily in selected segments,
establish a ceiling for the market share you wish to achieve
seek attractive new segments to apply strengths
Medium AttractivenessAverage Competitive PositionThe strategy advice for this cell is to selectively invest for earnings. Consider the following strategies:
segment the market to find a more attractive position
make contingency plans to protect your vulnerable position
Medium AttractivenessWeak Competitive PositionThe strategy advice for this cell is to preserve for harvest. Consider the following strategies:
act to preserve or boost cash flow as you exit the business
seek an opportunistic sale
seek a way to increase your strengths
Low AttractivenessStrong Competitive PositionThe strategy advice for this cell is to selectively invest for earnings. Consider the following strategies:
defend strengths
shift resources to attractive segments
examine ways to revitalize the industry
time your exit by monitoring for harvest or divestment timing
Low AttractivenessAverage Competitive PositionThe strategy advice for this cell is to restructure, harvest or divest. Consider the following strategies:
make only essential commitments
prepare to divest
shift resources to a more attractive segment
Low AttractivenessWeak Competitive PositionThe advice for this cell is to harvest or divest. You should exit the market or prune the product line.