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n 1968, then-CEO of GE, Fred Borch, asked McKinsey and Co. for an examination of GE’s corporate
structure. McKinsey’s examination revealed that GE’s structure was inadequate, and they argued that “the
firm should be organized on more strategic lines, with greater concern for external conditions than internal
controls.” The company was divided into strategic business units, or SBUs.
In 1971, a GE exec. asked McKinsey to evaluate strategic plans drawn up by the SBUs. According to
GE, the BCG Growth Matrix, with only two performance measures, was insufficient for the company’s needs.
From this request, the GE/McKinsey 9-block matrix, a system using a “dozen measures to screen for industry
attractiveness and another dozen to screen for competitive position,” was developed
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