The Business Book

192

M A R K E T

A T T R A C T I V E N E S S ,

B U S I N E S S

A T T R A C T I V E N E S S

THE MABA MATRIX

U

ntil the mid-20th century,

many businesses were

simple companies selling

one product. However, from around

1950, large corporations emerged,

which were divided into business

units. It was difficult to manage

these different units profitably, so

management consultants began to

develop frameworks to address the

new complexity. One such model

to arise during the early 1970s was

MABA—the market attractiveness/

business attractiveness framework.

It is also known as the GE-McKinsey

nine-box framework and the

GE-McKinsey Matrix, because

it was developed by consulting

IN CONTEXT

FOCUS

Business strategy

KEY DATES

Early 1970s The Boston

Consulting Group develops the

Growth-share matrix to help

companies decide how to

allocate resources to products

or business units on the basis

of their relative market shares

and growth rates.

1970s McKinsey & Company

consultants develops the

MABA matrix.

1979 Michael Porter develops

the Five Forces model to

enable companies to

analyze the structure of

their industry and develop

a more profitable position.

2000 The Market-Activated

Corporate Strategy (MACS)

framework is introduced by

McKinsey to measure each

business unit’s stand-alone

value within the corporation

and health for sale.

An organization must

allocate capital between

its different business units,

or to different products.

...Business

Attractiveness (the

competitive strength

of the unit or product in

that market).

A consistent method for

a company to identify

where to invest, and

where to cut back, is

to analyze...

...Market Attractiveness

(the size of the market, its

growth potential, and

pricing), and...

Using the MABA matrix can help a company plot the relative

profitability of its business units or products.