mytest > help > Part 2. MM4XL Tools > 1. Strategic Tools > McKinsey Matrix > How To Run the McKinsey Product Portfolio Analysis

McKinsey Portfolio Analysis

How To Run the McKinsey Product Portfolio Analysis

Tip: It's easy to get up to speed with MM4XL in a matter of seconds:

  1. Select the MM4XL tool you want to work with from the toolbar.
  2. Click the Example button on the form. This opens an example sheet with data for the tool you are using.
  3. With your mouse, select the data sets as explained in the example sheet, then click the OK button to print the report.

Step 1

Choose McKinsey Analysis in the MM4XL menu, or alternatively, click the button second from the left in the floating toolbar.

Step 2

In the window displayed, as pictured below, input the number of products you are going to analyze. Tick the check-box for the number of macro-factors you need, and input a weight for each one. Weights must range between 0 and 100 and the sum of each axis, Market Attractiveness and Competitive Advantage, must equal 100.

McKinsey GE Matrix Software for Product Portfolio Analysis and Management

Click OK and the two standard tables, shown below, will be created.

Step 3

Tick the check-box of the micro-factors you want to include in the analysis, and assign a weight to each for every product. These and the former weights are used to compute the product coordinates on the McKinsey grid. The computation is built by averaging macro-factors obtained as averages of the weighted micro-factor.

The weights you assign to micro-factors must range between 0 and 100, but unlike the previous window, their sum does not need to equal 100.

Changing the standard labels in the top row of the Market Attractiveness table, with one unique name for each product, automatically copies them to the Competitive Advantage table as well.

McKinsey GE Matrix Software for Product Portfolio Analysis and Management

Use the row named Revenue by Product in the Market Attractiveness table to input values that will be used to enlarge the size of the bubbles. If these are product sales, the bigger the bubble the larger its share of sales in the whole products' portfolio. The size of one bubble is computed as follows:

McKinsey GE Matrix Software for Product Portfolio Analysis and Management

You will find the bubble size very helpful to quickly identify existing relationships between the products competitive position and its financial contribution.

To enlarge the bubbles for other purposes, you could use market shares, investments, ROI or NPV, annual growth, price, or whatever kind of index you feel to be appropriate.

Step 4

Once you have assigned a unique name to each product, input revenues, ticked the micro-factors and assigned them a weight, simply click the button below to run the analysis. The Next button appears in cell A1 above the Market Attractiveness table.

Only the ticks and weights are mandatory fields.

McKinsey GE Matrix Software for Product Portfolio Analysis and Management

You can define your own micro-factors by simply replacing the predefined labels.

There you have it, running the McKinsey analysis in MM4XL is that easy!

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