How the BCG and GE McKinsey Matrices Help Prioritize Investments

Intro: Strategic planning often involves tough decisions about where to invest time, money, and talent. Two well-established frameworks—the BCG Growth-Share Matrix and the GE McKinsey Matrix—help businesses make these decisions with confidence. In this post, we'll explore how each works, how they differ, and how you can use them together to prioritize your strategic investments as part of a comprehensive strategic planning toolkit.

The BCG Matrix: Simplicity with Impact The Boston Consulting Group Matrix uses two dimensions: market growth rate and relative market share. It places business units or products into four quadrants:

• Stars: High growth, high market share
• Cash Cows: Low growth, high share
• Question Marks: High growth, low share
• Dogs: Low growth, low share

This matrix is simple but powerful—ideal for companies managing multiple products or business units. It guides resource allocation decisions, such as whether to invest, harvest, or divest.

The GE McKinsey Matrix: A More Nuanced View The GE McKinsey Matrix evaluates business units based on industry attractiveness and business strength, offering a 3x3 grid for more detailed analysis. It uses weighted criteria to assess each dimension, making it a more flexible and customizable option.

Use it to:

• Evaluate competing priorities more comprehensively
• Justify strategic choices with supporting data
• Align investment levels with strategic performance potential

When to Use Which? Use the BCG Matrix when you need quick, high-level portfolio insights. Choose the GE McKinsey Matrix when your strategic decision-making requires more variables and detail.

Part of a Complete Strategic Toolkit These tools complement others such as SWOT, Ansoff Matrix, and SPACE Matrix in building a full strategic picture. They are especially effective when used in combination to validate investment decisions.

Get Started: Download our ready-to-use templates for both the Boston Consulting Group Matrix and the GE McKinsey Matrix and bring clarity to your strategic investment decisions.