Strategic Analysis through the General Electric/McKinsey Matrix: An Application to the Italian Fashion Industry

Abstract

Introduced in the early Seventies as a specific framework for the evaluation of investment opportunities as part of product portfolio management, the General Electric/McKinsey Matrix is still widely used for the analysis of competitive scenarios. In this study, this managerial tool is applied to the apparel sector and four well-known Italian fashion companies are analyzed. The procedure for creating the matrix is described and a detailed presentation is made, for each company over a five-year-period, of the results relative to the two typical dimensions of the matrix: business competitiveness and industry attractiveness. Considering the current tendency of the majority of fashion and luxury companies to internationalize and develop multi-product and multi-brand diversification strategies, this study may be useful for marketers working in these sectors who intend to develop positioning and competitiveness analyses. Additionally, given the limited amount of academic studies on the application of this matrix to the fashion industry, this study can help fill that gap and describe the state of the art in the field, enriching the literature on the subject and creating new points of departure for future research. The paper presents results that, although they are based on a limited selection of companies, provide an accurate demonstration of the methodology applied and highlight a few differences found between the companies examined; in particular, between fashion brands with a very high positioning (“couture”) and those with a medium/high positioning (“diffusion” or “ready-to-wear”).