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variable is sensitive to productmarket definition ?Other variables depend on subjective judgements ?Inherent limitations of crosssection analysis ?Sample biased toward larger firms that are industry leaders GE(General Electric)/McKinsey MultiFactor Matrix ?Originally developed by GE’s planners drawing on McKinsey’s approaches ?Market attractiveness is based on as many relevant factors as are appropriate in a given context ?Businessposition assessment also made on a many factors ?SBU needs to be rated on each factor GE Multifactor Portfolio Matrix Industry Attractiveness Business Strengths High High Medium Medium Low Low Invest/Grow Selectivity /earnings Harvest /Divest Protect Position Invest to Build Build selectively Build selectively Selectively manage for earnings Limited expansion or harvest Protect refocus Divest Manage for earnings GE Multifactor Portfolio Matrix (Cont’d) Invest/Grow Selectivity /earnings Harvest /Divest Industry Attractiveness Business Strengths High High Medium Medium Low Low Some Limitations of the GE Model ?Subjective measurements across SBUs ?Process also highly subjective ?From the selection and weighting of factors to the subsequent development of both a firm’s position and the market attractiveness ?Businesses may have been evaluated with respect to different criteria ?Sensitive to how a product market is defined