Fundamentals of Management, 8th ed

GE Business Screen

Because the BCG matrix is relatively narrow and overly simplistic, GE developed the

GE Business Screen

, a more sophisticated approach to managing diversified business

units. The GE Business Screen is a portfolio management technique that can also be

represented in the form of a matrix. Rather than focusing solely on market growth and

market share, however, the GE Business Screen considers industry attractiveness and

competitive position. These two factors are divided into three categories to make the

nine-cell matrix shown in Figure 3.5.

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These cells, in turn, classify business units as win-

ners, losers, question marks, average businesses, or profit producers.

As Figure 3.5 shows, both market growth and market share appear in a broad list of

factors that determine the overall attractiveness of an industry and the overall quality

of a firm’s competitive position. Other determinants of an industry’s attractiveness

(in addition to market growth) include market size, capital requirements, and compet-

itive intensity. In general, the greater the market growth, the larger the market, the

Competitive position

Industry attractiveness

Low

Winner

Medium

High

Good

Competitive position

1. Market share

2. Technological know-how

3. Product quality

4. Service network

5. Price competitiveness

6. Operating costs

Industry attractiveness

1. Market growth

2. Market size

3. Capital requirements

4. Competitive intensity

Poor

Medium

Winner

Profit

producer

Winner

Average

business

Loser

Question

mark

Loser

Loser