Week 5 Draft a McKinsey Matrix

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Webster University *

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5030

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Feb 20, 2024

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Week 5: Draft a McKinsey Matrix Webster University – MBA 5030 The following data is taken from a firm with several business units. Using the line of business information and the weightings provided, rate both the competitive position and attractiveness of each business unit. Once you’ve obtained a score for each, map it onto a 9-cell McKinsey matrix. For clarification, the analyzing the portfolio section will need to be completed separately for each of the 5 business units. The resulting scores will give you graph points to place on a single McKinsey Matrix. 2.5 0.5 2 1.00 0.4 0.6 1 1 1 4 Credit Retail 2 0.8 1.2 2 3.5 1.5 4 3 2 2

1 3 3 1.2 2 1.8 3 1 2 2 Brokerage Insurance 1.5 3.6 1.2 2.4 1 0.5 3 2 1 4 Real Estate 2.8 1.6 4 1.2 2 1.5 3 1.5 3 3

What are your recommendations for each business unit? Should they be targeted for growth or divested? Justify your answer. For retail initially I would divest due to this unit being in the divest/harvest matrix. This unit has low share of profit and poor industry attractiveness with high rivalry and low industry growth prospects. Due to this unit having an extremely high share of revenue, I recommend attempting to grow this unit and focus on decreasing competitive rivalry by changing some of their retail market to increase industry attractiveness. For credit I would target it for growth as it is in the invest matrix. It has the highest profitability and a high market share making it one of the highest rated overall in industry attractiveness and in its competitive position. I recommend increasing its industry growth rate and decreasing its competitive rivalry. For Insurance I would target it for growth as it is in the invest matrix. It is the unit with the highest profit share, and it has a relatively high industry attractiveness as well. This unit also has the second largest industry growth rate and the second largest share of revenue. insurance Retail Real estate Credit Brokerage

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For brokerage I would target it for growth if we have additional funding and if this unit can be improved due to it having the highest growth rate. It is in the center positions of the matrix making its investment rocky due to a high degree of uncertainty. A factor that may hinder its improvement would be that this unit has the lowest share of profit and the lowest business unit strength overall. For Real estate I would target it for growth as it is in the invest matrix. This unit has high profitability. This unit also has the lowest competitive rivalry making it attractive to grow as well. This unit has medium industry attractiveness and high unit strength.

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