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Portfolio Analysis. GE Tool for Analyzing Opportunities & Ability to Compete. GE Portfolio Analysis. Classification of SBUs/products into nine cell matrix based on Market Attractiveness Multiple Indicators Business Strength Multiple Indicators. Steps In Developing GE Matrix.

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portfolio analysis

Portfolio Analysis

GE Tool for Analyzing Opportunities & Ability to Compete

ge portfolio analysis
GE Portfolio Analysis
  • Classification of SBUs/products into nine cell matrix based on
      • Market Attractiveness
        • Multiple Indicators
      • Business Strength
        • Multiple Indicators
steps in developing ge matrix
Steps In Developing GE Matrix
  • Select Factors & Indicators.
  • Assign each indicator a weight (total = 1) based on its importance.
  • Rate the industry on industry indicators and company on business indicators on scale of 1(weak) – 5 (strong).
  • Multiply weight times rating and total for summary measures.
ge portfolio analysis sample industry market indicators
GE Portfolio AnalysisSample Industry/Market Indicators
  • Market Factors
      • Size
      • Growth Rate
      • Cyclicality
      • Seasonality
  • Competition
      • Type of competitors
      • Degree of Concentration
  • Financial & Economic
      • Contribution Margins
      • Barriers to Entry or Exit
ge portfolio analysis industry market indicators
GE Portfolio AnalysisIndustry/Market Indicators
  • Technological
      • Patents & copyrights
      • Will it become obsolete
  • Sociopolitical
      • Social attitudes & trends
      • Laws & government regulations
ge portfolio analysis business strength indicators
GE Portfolio AnalysisBusiness Strength Indicators
  • Market
      • Company’s Market Share
      • Company’s Sales or Share Growth Rate
  • Competition
      • Strength of product, promotion, price, distribution, financial resources, management relative to competition
  • Financial & Economic
      • Company’s Margins
      • Economies of scale
ge portfolio analysis business strength indicators8
GE Portfolio AnalysisBusiness Strength Indicators
  • Technological
      • Company’s ability to cope with change
      • Technological skills
      • Patent Protection
  • Sociopolitical
      • Company’s responsiveness & flexibility
ge portfolio example

Market Factor

Weight

Rating (1- 5)

Value

Size

.33

5

1.65

Growth

.33

3

.99

Profit Margins

.34

2

.68

3.32

Business

Market Share

.33

1

.33

Product Quality

.33

5

1.65

Distribution Net

.34

2

.68

2.66

GE Portfolio Example
ge portfolio analysis10

Market

Business

High

Medium

Low

High

Medium

Low

GE Portfolio Analysis
slide11

Competitive

Position

Market

Attractiveness

Strong

Medium

Weak

High

  • Maintain Leadership
  • Invest to Grow
  • Concentrate on Maintaining Strength
  • Challenge Leader
  • Invest to Build Selectively
  • Reinforce Strengths
  • Overcome Weakness, Find Niche or Quit
  • Build Selectively

Medium

  • Challenge Leader/Build Selectively
  • In most attractive markets
  • Or counter competition
  • Emphasize profitability by raising productivity
  • Manage for Earnings
  • Protect existing programs
  • Concentrate on profitable, less risky segments
  • Harvest (Gradual Withdrawal) or Limited Expansion
  • Look ways to expand without high risk
  • Or Minimize investment

Low

  • Generate Cash
  • Manage for current earnings
  • Concentrate on attractive Segments
  • Defend Strengths
  • Harvest
  • Minimize Investment
  • Protect positions in most profitable segments
  • Divest
  • Sell at time that will maximize cash value
  • Cut fixed costs and avoid investment