ADJUSTING GENERAL ELECTRIC MULTIFACTOR PORTFOLIO MODEL FOR FUZZY ANALYSIS OF SBUS PERFORMANCESJournal: MEST Journal (Vol.7, No. 1)
Publication Date: 2019-01-15
Authors : Aleksandar Pesic; Duska Pesic; Slavko Ivkovic;
Page : 64-70
Keywords : Portfolio analysis; GE/McKinsey matrix; fuzzy logic;
Traditional General Electric Multifactor portfolio model is designed to serve as a strategic tool for analyzing strategic business units (SBUs) in diversified organizations and it can be used for optimally allocating resources among those various SBUs. Some of the limitations related to the implementation of this model refer to the difficulties in identifying and assessing critical internal and external criteria required for the matrix construction and in its inability to precisely determine the numerical value for the certain criteria. Since Fuzzy sets theory represents a strict mathematical framework for dealing with the problems of imprecision and making decisions under ambiguous conditions, the aim of this paper is to introduce an alternative approach to the quantification of the General Electric Multifactor portfolio model which includes the utilization of fuzzy logic. In that sense, specific characteristics of fuzzy triangular numbers are applied to the standardized GE/McKinsey matrix in order to extract the optimal strategy solutions and adequately handle the uncertainty and imprecision associated with the subjective assessment of Strategic Business Unit (SBU) performances based on two dimensions: industry attractiveness and internal business strength.
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Last modified: 2019-01-12 22:00:05