Question
The GE McKinsey Matrix is a strategic business tool that helps companies decide where to invest among multiple business units or product lines. It evaluates opportunities based on two dimensions: industry attractiveness and business unit strength.
For Google products, the matrix could be applied as follows:
1. Industry Attractiveness: This could include factors such as market size, growth rate, profitability, and competitive intensity. For example, the search engine market, where Google Search operates, is highly attractive due to its large size and high growth rate.
2. Business Unit Strength: This could include factors such as market share, brand strength, technological capability, and quality of personnel. For example, Google Maps has a high market share and strong brand, making it a strong business unit.
By plotting Google's products on the GE McKinsey Matrix, Google can identify which products to invest in (high industry attractiveness and high business unit strength), which to maintain (high in one dimension but low in the other), and which to divest (low in both dimensions).
Remember, the matrix is a strategic tool and should be used in conjunction with other tools and analysis to make informed business decisions.
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When it comes to investments, businesses are faced with the challenge of limited resources but also many possibilities. For diversified businesses, deciding which products to invest in is even more difficult. This issue was addressed by the GE/McKinsey matrix. At that time, General Electric had many unrelated products and didn't have the desired returns from its investments. They consulted McKinsey, and the resulting directional policy matrix was created. It evaluates opportunities based on industry attractiveness and competitive capability.
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