Example of a Quantitative Evaluation
of Industry Attractiveness for the
General Electric Matrix
As originally developed, the General Electric (GE) Matrix does not have quantitative axes. However, for purposes of this course, students may use the following suggested approach to document their placement on the "Industry Attractiveness" (x) axis.
Steps
1 – Very unattractive
2 – Somewhat unattractive
3 – Somewhat attractive
4 – Very attractive
Example
Industry (market) is defined as sales and service of high-end, custom-installed, home entertainment systems to consumers in Miami-Dade County, Florida.
| 3 | Market growth rate is projected to be 7-8% per year, in line with the company’s desired growth rate of 10% per year (balance of growth is projected to come from an increase in share of market). |
| 3 | Technological skills are above what are required for lower quality systems, reducing the number of potential competitors. Company is skilled in the technology required for installing and servicing these systems. |
| 4 | The niche market is of a small size (in terms of overall entertainment products) meaning it is not attractive to large companies, but of more than adequate overall size to provide the desired company growth. |
| 2 | Product technology in high-end systems can change unpredictably and is also somewhat subject to fads. This could potentially place the company at risk if it could not obtain limited production, but customer demanded products. |
| 4 | There are significant barriers to entry for smaller companies in the form of very limited and exclusive distribution agreements between highly regarded manufacturers and only one or two retailers in each geographic area. These are usually limited to retailers with full installation and service capabilities, which AE has. |
| 3 | The market is generally highly fragmented. There are only two other comparable size companies in the market. All other competitors are very small and not competitive threats. |
| 3.17 | Average rating (19/6=3.17) |
- R. S. Kulzick – 3/7/00 -