McKinsey (model)

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The McKinsey Matrix is a decision-making tool for business leaders. Developed by McKinsey & Company, it helps define precisely the segment in which it is worth investing in the future. To define the performance of each Strategic Business Area in their market, the McKinsey matrix is based on three criteria:

– domain attractiveness, which refers to the economic and strategic appeal of the relevant sector,
Market attractiveness, which refers to the company’s ability to control and enhance the value of its activity in the market. It is calculated according to criteria such as the size of the market it occupies, its growth, its profitability, etc,
– The competitive position, which designates the strengths of your company in relation to its competitors. It varies considerably depending on the quality of the products offered, the company’s market share and customer loyalty. These criteria are all factors of competitiveness.

The McKinsey matrix proposes to position the SBAs on a 9-box grid. The business areas are classified in each box according to their assessment on a 3-point scale: strong, medium and weak.

The closer a strategic business area is located to the top left corner of the table, the more the company must take it into consideration. The SBAs positioned on the opposite side, i.e. in the lower right corner of the table, should be dropped. Those located between the two should be maintained and made profitable.