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BCG Matrix
According to the BCG Matrix, the electronics category is a question mark characterized by low market share, but potential high growth. In this instance, a decision must be made to invest heavily, sell off or invest nothing and generate whatever cash is possible (BCG Matrix). Appliances, on the other hand, are cash cows enjoying high market share, but little growth. Because growth is low, investments should be kept to a minimum with profit maximization in mind. Portfolio planning methods such as the BCG Matrix are intended as guidelines to help managers overcome tendencies to use unstructured judgment, which is prone to distortion by power or emotional factors that lead away from rational profit maximization (Brodie and Armstrong, 2003). At the same time, these authors caution that there's little evidence exists to support a causal relationship between market growth and profits, or between market share and profitability
These comments are not intended to dismiss the BCG Matrix as irrelevant, but to emphasize that every planning method has it's limitations...
For example, the Five Competitive Forces developed by Porter advises a detailed analysis of the entry of competitors, threat of substitutes, bargaining power of suppliers, and rivalry among the existing players to determine industry attractiveness (Five competitive forces model Porter). And, the GE/McKinsey suggests a far wider range of attributes for competitive advantage than market share such as strength of assets and competencies, relative brand strength, customer loyalty, relative cost position and profit margins, distribution strength and production capacity, innovation, quality, access to financial and investment resources, and management strength (McKinsey matrix -- GE matrix). Clearly, this company needs to explore many factors other than…
Bibliography
BCG Matrix. Retrieved September 2, 2005 from Web site: http://www.valuebasedmanagement.net/methods_bcgmatrix.html
Brodie and Armstrong (2003, December 30). Effects on portfolio planning methods on decision making: Experimental Results. Retrieved September 2, 2005 from Web site: http://www.manyworlds.com/exploreCO.aspx?coid=CO12300315184495
Five competitive forces model Porter. Retrieved September 2, 2005 from Web site: http://www.valuebasedmanagement.net/methods_porter_five_forces.html
McKinsey matrix -- GE matrix. Retrieved Sepember 2, 2005 from Web site: http://www.valuebasedmanagement.net/methods_ge_mckinsey.html
The BCG Growth-Share Matrix. Retrieved September 2, 2005 from Web site: http://www.netmba.com/strategy/matrix/bcg/
BCG Matrix Strategic Management The BCG Matrix: An overview and a hypothetical situation The Boston Consulting Group (BCG) Matrix is an efficient way to visually represent a company's portfolio of goods and services, and provides a way for organizations to evaluate their strategic possibilities. The BCG Matrix classifies a company according to three primary business interests or units (BCG Matrix, 2012, Net MBA). The Matrix is represented in the form of four quadrants:
BCG Matrix, an analytic tool designed and named for the Boston Consulting Group, provides insight into corporate strategy regarding a company's operating units and products. The focus of the matrix is on "market growth and market share of the organization's product portfolio relative to their largest competitor" (NetMBA.com. N.D. PP. 1). Companies should according to the matrix, allocate capital to portfolio investments which are in a fast growing market that
Items such as the potential partner's track record for development efficiency was a definite strength. In contrast, one weakness was the sharing of profits once the product went to market, as well as the fact that our company would not have sole ownership of the product. There was the opportunity to bring the product to market ahead of any potential competitors, plus the opportunity to develop a relationship that
SWOT The BCG index was designed to help managers determine how departments were performing in their company (NetMBA, 2002). The matrix is a simple calculation that labels the departments as a star, question mark, cash cow or dog. These designations have specific meanings as to the market position and cash flow. The company in question has had two departments analyzed using the BCG matrix. The question is to the efficacy
3. Limitation of individual model - synergies obtained by combining strategic analyses models All analysis models presented in the previous chapter represent useful but not exhaustive methods of deciding the future of a company or its products. As there is no perfect model, the joint usage of them might bring most value to the company. Ansoff analysis generally assumes that diversification will bring higher returns when higher levels of risks are undertaken (diversifying
AB Inbev's BCG ansoff analysis strategic options. Please avoid marketing product, specific strategic groth a company. In addition I summarise merger advantages/benefits/opportunities disadvantages challenges sussccessful inits bid buy S Anheuser-Busch InBev: Market analysis Anheuser-Busch InBev, is the largest brewing company in the United States, boasting some of the most successful brands of alcohol on the market in its portfolio. The BCG Growth-Share Matrix categorizes all business units according to market share