In the GE/McKinsey nine-cell matrix, what are the two axes used to evaluate business units?

• A. Industry attractiveness (vertical) and business unit competitive strength (horizontal).
• B. Market size and growth rate.
• C. Return on investment and risk.
• D. Customer satisfaction and supply chain efficiency.

Answer: (A)

The GE/McKinsey matrix uses two dimensions to assess where to invest across a portfolio: industry attractiveness and the business unit’s competitive strength. The vertical axis measures how appealing an industry is in terms of growth, profitability, size, and overall long-term potential. The horizontal axis measures how well a business unit is positioned relative to competitors—things like market share, cost advantages, product quality, brand, and distribution strength. Plotting each unit on this 3-by-3 grid guides strategic decisions about resource allocation, with high attractiveness and strong position warranting aggressive investment, while low attractiveness and weak position suggest harvesting or divestment. The option described matches these axes: industry attractiveness on the vertical axis and competitive strength on the horizontal axis. Other choices refer to financial metrics or internal performance factors that aren’t the two axes used in the GE/McKinsey framework.