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Business Administration QUESTION #9588
Question 1
An organization's strategic analysis reveals high industry attractiveness but weak internal competitive position. Using the GE-McKinsey matrix, what strategy is recommended, and what does this imply for resource allocation?
  • Invest and grow — the attractive industry justifies full resource commitment despite internal weakness
  • Selective investment/manage for earnings — the organization should invest in specific areas where it can build competitive strength while protecting existing positions, rather than committing fully or divesting✔️
  • Harvest and divest — attractive industries are too competitive for weak players; the organization should exit before market position deteriorates further
  • Hold position — the organization should maintain current resource allocation and wait for the competitive environment to shift favorably
Correct Answer Explanation
In the GE-McKinsey nine-cell matrix, high industry attractiveness + low business strength falls in the 'Selective Growth/Earn' zone — the organization should not invest uniformly (too weak) nor exit (industry is attractive), but selectively build strengths in specific segments where competitive advantage is achievable. This is the key insight distinguishing GE-McKinsey from simpler 2×2 frameworks like BCG.