Page 194 - (DK) The Business Book

192
IN CONTEXT
FOCUS
Business strategy
KEY DATES
Early 1970s The Boston
Consulting Group develops the
Growth-share matrix to help
companies decide how to
allocate resources to products
or business units on the basis
of their relative market shares
and growth rates.
1970s McKinsey & Company
consultants develops the
MABA matrix.
1979 Michael Porter develops
the Five Forces model to
enable companies to
analyze the structure of
their industry and develop
a more profitable position.
2000 The Market-Activated
Corporate Strategy (MACS)
framework is introduced by
McKinsey to measure each
business unit’s stand-alone
value within the corporation
and health for sale.
MARKET
ATTRACTIVENESS,
BUSINESS
ATTRACTIVENESS
THE MABA MATRIX
An organization must A consistent method for
allocate capital between a company to identify
its different business units, where to invest, and
or to different products. where to cut back, is
to analyze...
...Business
...Market Attractiveness
Attractiveness (the
competitive strength (the size of the market, its
of the unit or product in growth potential, and
pricing), and...
that market).
Using the MABA matrix can help a company plot the relative
profitability of its business units or products.
ntil the mid-20th century, develop frameworks to address the
many businesses were new complexity. One such model
U simple companies selling to arise during the early 1970s was
one product. However, from around MABA—the market attractiveness/
1950, large corporations emerged, business attractiveness framework.
which were divided into business It is also known as the GE-McKinsey
units. It was difficult to manage nine-box framework and the
these different units profitably, so GE-McKinsey Matrix, because
management consultants began to it was developed by consulting