GE Business Screen
The GE business screen was developed to help the marketing managers conquer the problems that are generally associated with the Boston Matrix (BCG). The problems are lack of credible business information, BCG deals primarily with commodities not brands or Strategic Business Units (SBU’s) and the other problem is that cash flow is often a more consistent pointer of position as compared to market growth/share. The GE business screen is a nine-cell matrix. The vertical axis represents industry effectiveness. Factors such as bargaining power of the buyers and the suppliers, the threat of new entrants and substitutes and the internal rivalry are weighted and considered. The horizontal axis represents the ability to compete in the industry. It includes an analysis of value and quality of the offering, staying power, experience and its market share. There are no of circles superimposed of variable size. They represent the size of each market. The larger the circle, the larger the market and larger the segment, the larger is the market share.
The nine cells are grouped into three zones:
- The Green Zone: it consists of three cells in the upper left corner of the matrix. If your enterprise or organization falls in this zone, you are in a favorable position with relatively attractive growth opportunities. This indicates a “green light” to invest in the service or product.
- The Yellow Zone: it consists of the three diagonal cells from lower left to the upper right. If your enterprise falls in this zone, your company is viewed as having medium attractiveness. Management must therefore exercise caution when making additional investments in the product or services. The suggested strategy is to seek and maintain share rather than growing or reducing share.
- The Red Zone: it consists of three cells in the lower right corner. A position in the red zone of the matrix is not attractive. The suggested theory is that management should begin to make plans to exit the industry.
Written by: Matt
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Tagged as attractiveness, bargaining power, boston matrix, cell matrix, credible business, diagonal cells, favorable position, ge business, green zone, growth opportunities, horizontal axis, internal rivalry, marketing managers, matrix bcg, power experience, red zone, staying power, variable size, vertical axis, yellow zone + Categorized as Economy articles, Human resources, Ladership & Management