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

Cesare Amatulli, Tiziana Caputo, Gianluigi Guido

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”).

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International Journal of Business and Management   ISSN 1833-3850 (Print)   ISSN 1833-8119 (Online)

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