What to remember
- Define each factor, source, direction and weight.
- Use a common scale with observable anchors.
- Test weights and uncertain evidence.
- Keep synergies and hard constraints outside the aggregate score.
Distinguish GE-McKinsey from BCG
BCG uses two direct indicators: growth and relative share. GE-McKinsey replaces those proxies with two multi-factor axes: market attractiveness and business competitive strength.
This added richness requires governance. Factors are neither universal nor automatically comparable. They must fit the decision and avoid double counting.
Build factors and scales
Each factor has a definition, unit or scale, preferred direction, source, weight and missing-data rule. Anchors 0 and 100 describe observable performance within the decision scope.
Illustrative attractiveness example: size 30% scored 80, growth 25% scored 60, margin 25% scored 70 and regulatory risk 20% scored 40. The weighted sum is 64.5 on the declared scale.
| Factor | Weight | Component value | Contribution |
|---|---|---|---|
| Size | 30% | 80 | 24.0 |
| Growth | 25% | 60 | 15.0 |
| Margin | 25% | 70 | 17.5 |
| Regulatory risk | 20% | 40 | 8.0 |
| Total | 100% | 64.5 |
Calculate two axes without mistaking score for truth
A simple additive model sums component values multiplied by weights when scales are coherent and compensation is accepted. A score of 64.5 is neither 64.5% success probability nor 64.5% economic value.
For competitive strength, relative position weighted 35% at 70, differentiation 25% at 80, distribution 20% at 60 and unit economics 20% at 45 produce 65.5. Boundaries are documented and tested.
| Factor | Weight | Component value | Contribution |
|---|---|---|---|
| Relative position | 35% | 70 | 24.5 |
| Differentiation | 25% | 80 | 20.0 |
| Distribution | 20% | 60 | 12.0 |
| Unit economics | 20% | 45 | 9.0 |
| Total | 100% | 65.5 |
Interpret the boxes and limitations
Invest, select and harvest zones are starting directions. A business near a boundary may move with plausible evidence or weights, so sensitivity must remain visible.
In the target workflow, Plot is the editorial link for GE analysis and Grid for multi-criteria scorecards and a strength-attractiveness DPM distinct from GE-McKinsey. These links prove neither a public runtime, automatic import nor autonomous allocation.
Frequently asked questions
Which factors should be used?
Factors that materially describe the decision, avoid overlap and have a source and scale. There is no universal list.
How many factors per axis?
Enough to capture material drivers, but few enough to understand contributions and test sensitivity.
Does the zone automatically order investment or divestment?
No. Add synergies, constraints, costs, risks and sequencing options.
Full sources
- The GE-McKinsey nine-box matrixComplete source available online · Read the complete source
- Thinking strategically with portfolio modelsComplete source available online · Read the complete source
- McKinsey matrix concept and applicationComplete source available online · Read the complete source