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The McKinsey matrix

11 May, 2016 - 11:43

The McKinsey matrix is a later and more advanced form of the BCG Matrix. It has several differences with BCG’s matrix, as discussed below. It is illustrated in Figure 3.7.

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Figure 3.7 McKinsey matrix
Source: http://www.quickmba.com/strategy/matrix/bcg/
  1. Market (Industry) attractiveness replaces market growth as the dimension of industry attractiveness. Market attractiveness includes a broader range of factors other than just the market growth rate that can determine the attractiveness of an industry/market. For example, market attractiveness could be determined using Porter’s five forces model.
  2. Competitive strength replaces market share as the dimension by which the competitive position of each Strategic Business Unit is assessed. Competitive strength likewise includes a broader range of factors other than just the market share that can determine the competitive strength of a Strategic Business Unit.
  3. Finally the McKinsey matrix works with a 3x3 grid, while the BCG Matrix has only 2x2. This also allows for more insight in the analysis of the business.