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Brief History
In the late sixties and
early seventies, while the
Boston Consulting Group were
devising the BCG or Growth
Share matrix, General
Electric, a leading
corporation in the United
States, were also looking at
concepts and techniques for
strategic planning. The firm
was disappointed in the
profits that they had made
from their investments in
the various businesses,
which suggested flaws in
GE’s approach to investment
decision-making. They became
interested in the
Growth-Share matrix and
liked the visual approach
depicting the positioning of
a firm’s businesses on the
matrix. General Electric,
from all their own strategic
planning research, objected
to the two dimensional
matrix which relied on
market growth for industry
attractiveness and relative
market share for business
strength.
McKinsey and Company
GE asked McKinsey and
Company, a consulting
company in the USA, to
develop a portfolio approach
with a wider dimension than
the BCG matrix. In 1971
McKinsey and Co developed
the business screen for
General Electric to
differentiate the potential
for future profit in each of
the 43 strategic business
units. This matrix is also
known as the industry
attractiveness – business
strength matrix and the
nine-box matrix.
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