Question

The nine-cell GE matrix is an improvement over the four cell BCG matrix because: __________.

A. it allows more businesses to be included in the portfolio analysis
B. it incorporates explicit consideration of a wider variety of strategically relevant variables
C. it eliminates the need to consider average businesses it creates fewer types
D. It incorporates explicit consideration of a wider variety of strategically relevant variables and allows for a finer distinction in categorizing businesses

Answer 1

D. It incorporates explicit consideration of a wider variety of strategically relevant variables and allows for a finer distinction in categorizing businesses

Step-by-step explanation:

While the BCG matrix incorporates the two dimensions of market share and market growth in a four cell model, the GE includes industry attractiveness and current business strength. Since it contains more cells and defined levels of variables (e.g. low industry attractiveness or medium business strength) rather than the limited four, discrete options of the BCG matrix (cash cow, question mark...), the GE matrix includes a finer distinction among existent product lines and businesses, where it can be carefully mapped where a particular business belongs.