Use of the GE McKinsey matrix is recommended if an organisation is made up of many business units or if a business unit is made up of a number of different product lines. General Electric used this matrix at five different levels in the organisation: product, product line, market segment, SBU, business sector.
The GE McKinsey matrix is important for assigning priorities for investment in the various businesses of the firm and is guidance for resource allocation. (Hax & Majluf 1983) Investment is assigned according to the generic strategies laid out above but generally is given to businesses who show strength in an attractive market.
This matrix can be used at all levels within the organisation. At the corporate level, the portfolio of businesses making up the firm can be analysed on the matrix, at the business unit level, the products making up the business’s portfolio can be mapped out onto the matrix
This matrix allows one to set a strategy for the future after mapping the portfolio in the present and forecasting the future positions by assessing the factors constituting the business strengths. It allows an organisation to focus on the strengths and weaknesses of the business units or products.