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The General Electric (GE) portfolio model for competitive analysis of strategic business units (SBUs) should be compared with the Boston Consulting Croup's growth-share matrix. The GE model:
A. Considers such factors for market attractiveness as market share, growth rate, and marketing skills.
B. Considers such factors for business strength as market size, growth rate, and price levels.
C. Calculates an index for each of its two variables.
D. Is a matrix with two variables:relative market share and market growth rate.
Answer: C
The GE model is a multifactor portfolio matrix with two variables. Business strength or competitive position (BUS) is on one axis, and market attractiveness (MAT) is on the other. BUS is classified as strong, medium, or weak, and MAT is classified as high, medium, or low. Thus, the matrix in this model is 3 x 3 and has nine cells. SBUs are shown in the matrix as circles. Circle size is directly proportional to the size of the related market, with a shaded portion in the circle that represents the SBU's market share. To measure BUS and MAT, the firm must isolate the multiple factors affecting each, quantify them, and create an index. Factors will vary with each business. The measurements will provide the values on the axes of the matrix.

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