Low market share/ low market growth Dogs: They have a low market share and a low growth

rate and
thus neither generate nor consume a large amount of cash. Market presence is weak and so its going to take a lot of hard work to get noticed. There are no large scale productions and so its difficult to make a profit. Dogs being business with weak market shares in low growth markets are generally a drag on a company and its resources.

Question marks: They are growing rapidly and thus consume

large amount of cash but because they have low market share they do not generate much cash. Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share. They aren t generating much revenue right now because you don t have a large market share but they are in high growth markets so the potential to make money is there. They are in high risk category while stars are in medium risk category.

High market share/ high market growth Stars: !tars generate large amount of cash because of their
strong relative market share but also consume large amount of cash because of their high growth rate and therefore the cash in each direction nets out. The portfolio of a diversified company always should have stars that will become the ne"t cash cows and ensure future cash generation. #ere you are well established .there should be some growth opportunities and you should work hard to realize them. $ star needs good deal of investment support as it operates in a high growth market. %t normally does not bring in immediate profits but holds great potential for future.

High market share/low market growth Cash Cows: $s leaders in mature market cash cows inhibit a
return on assets that is greater than the market growth rate tad thus generate more cash than they consume. &ash cows provide the cash required to turn question marks into market leaders' to cover the administrative cost of the company' to fund research and development' to service the corporate debt and to pay dividends to shareholders. They are net generators of resources. &ash cows bring a lot of cash to the company. %t also brings in higher profits. %t does not need heavy instruments( being in low growth.

The GE matrix is a technique used in brand marketing and product management to help a company decide what product)s* to add to its product portfolio' and which market opportunities are worthy of continued investment. +, multi-factor model was first developed by Mckinsey for +eneral ,lectric in the ./01s. GE Matrix is similar to the 2&+ as it is plotted on a two-dimensional grid. %n most versions of the matri":

the 3-$"is comprises industry attractiveness measures' such as Market 4rofitability the 5-$"is comprises business strength measures' such as 4rice' !ervice 6evels etc.

The planning company should invest in opportunities that appear to the top left of the matri". The planning company should invest in segments that are both attractive and in which it has established some measure of competitive advantage. 7pportunities appearing in the bottom right of the matri" are both unattractive to the planning company and in which it is competitively weak. 7pportunities appearing 8in between8 these e"tremes pose a problem' and the planning company has to make a strategic decision whether to 8redouble its efforts8 in the hopes of achieving market leadership' manage them for cash' or cut its losses and divest. %t was originally developed to help marketing managers overcome the problems that are commonly associated with the 2oston Matri" )2&+*' such as the problems with the lack of credible business information . 2&+ deals primarily with commodities not brands or !trategic 2usiness 9nits )!298s*' and that cashflow is often a more reliable indicator of position as opposed to market growth:share. The +, 2usiness !creen introduces a three by three matri"' +rowth:share are replaced by competitive position and market attractiveness. The point is that successful !298s will go and do well in attractive markets because they add value that customers will pay for. ;or market attractiveness: < !ize of market. < Market rate of growth. < The nature of competition and its diversity. < 4rofit margin. < %mpact of technology' the law' and energy efficiency. < ,nvironmental impact. . . . and for competitive position:

< Market share. < Management profile. < = > D. < Quality of products and services. < 2randing and promotions success. < 4lace )or distribution*. < ,fficiency. < &ost reduction. The GE matrix has 5 steps: < 7ne - %dentify your products' brands' e"periences' solutions' or !298s. < Two - $nswer the question' ?hat makes this market so attractive@ < Three - Decide on the factors that position the business on the +, matri". < ;our - Determine the best ways to measure attractiveness and business position. < ;ive - ;inally rank each !29 as either low' medium or high for business strength' and low' medium and high in relation to market attractiveness.

Limitations o GE Matrix There is no research to prove that there is a relationship between market attractiveness and business position. < The interrelationships between !298s' products' brands' e"periences or solutions is not taken into account. < This approach does require e"tensive data gathering. < !coring is personal and subAective. < There is no hard and fast rule on how to weight elements. < The +, matri" offers a broad strategy and does not indicate how best to implement it.

The M!"inse# matrix / General Ele!tri! Matrix The GE / M!"inse# Matrix is more sophisticated than the 2&+ Matri" in three aspects:

.. Market $%n&ustr#' attra!ti(eness replaces market growth as the dimension of industry attractiveness. Market $ttractiveness includes a broader range of factors other than Aust the market growth rate that can determine the attractiveness of an industry : market. &ompare also: 4orter8s ;ive &ompetitive ;orces model

B. Competiti(e strength replaces market share as the dimension by which the competitive position of each !29 is assessed. &ompetitive strength likewise includes a broader range of factors other than Aust the market share that can determine the competitive strength of a !trategic 2usiness 9nit. C. ;inally the GE / M!"inse# Matrix works with a )*) gri&' while the +CG Matrix has only B<B. This also allows for more sophistication.

T#pi!al $external' a!tors that a e!t Market ,ttra!ti(eness: - Market size - Market growth rate - Market profitability - 4ricing trends - &ompetitive intensity : rivalry - 7verall risk of returns in the industry - ,ntry barriers - 7pportunity to differentiate products and services - Demand variability - !egmentation - Distribution structure - Technology development

Typical )internal* factors that affect &ompetitive !trength of a !trategic 2usiness 9nit: - !trength of assets and competencies - =elative brand strength )marketing* - Market share - Market share growth - &ustomer loyalty - =elative cost position )cost structure compared with competitors* - =elative profit margins )compared to competitors* - Distribution strength and production capacity - =ecord of technological or other innovation - Quality - $ccess to financial and other investment resources

- Management strength

7ften' !trategic 2usiness 9nits are portra#e& as a !ir!le plotte& in the GE M!"inse# Matrix' whereby: - The size of the circles represent the Market !ize - The size of the pies represent the Market !hare of the !298s - $rrows represent the direction and the movement of the !298s in the future.