In the GE/McKinsey matrix, which action best describes 'divest'?

• A. Invest heavily in a top-tier business.
• B. Maintain and harvest for long-term profitability.
• C. Grow aggressively regardless of position.
• D. Discontinue or divest a business with unattractive industry and weak position.

Answer: (D)

In portfolio strategy, actions are chosen based on industry attractiveness and the firm’s competitive strength in each business. Divest means to discontinue or sell a business unit that sits in an unattractive industry and has a weak competitive position, freeing resources to invest in more promising areas.

This is why the option describing discontinuing or divesting a business with an unattractive industry and a weak position is the best match. It signals exiting low-potential units rather than trying to grow them or squeeze more cash from them.

The other approaches don’t fit divestment: investing heavily in a top-tier business is a growth move aimed at strong-position units; maintaining and harvesting for long-term profitability is a hold/harvest strategy appropriate for steady cash generators but not for exiting; growing aggressively regardless of position ignores the matrix’s assessment of industry attractiveness and competitive strength.