View
224
Download
0
Category
Preview:
Citation preview
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 1/19
Matrix and ModelMatrix and Model
BCG MatrixBCG Matrix
GE (nine Cells matrix)GE (nine Cells matrix)
Porter’s five force modelPorter’s five force model
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 2/19
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 3/19
Strategy RecommendationsStrategy Recommendations
InvestmentInvestmentFurther GrowthFurther Growth
Maintain Market PositionMaintain Market Position
Cash flowCash flowSelf-sustaining: Fund their own growthSelf-sustaining: Fund their own growth
Require funds from other SBUs (Cash Cows)Require funds from other SBUs (Cash Cows)
Assure the future of the companyAssure the future of the companyGrow into Cash CowsGrow into Cash Cows
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 4/19
Strategy RecommendationsStrategy Recommendations
InvestmentInvestmentMaintain market shareMaintain market share
Maintain capacityMaintain capacity
Cash FlowCash FlowPositive cash flowPositive cash flow
Provides funding to support Stars andProvides funding to support Stars and
“?”“?”
No potential for profit growthNo potential for profit growth
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 5/19
Strategy RecommendationsStrategy Recommendations
InvestmentInvestmentIncrease market shareIncrease market share
Selectively develop into StarsSelectively develop into Stars
Cash FlowCash FlowRequire funds from other SBUs (CashRequire funds from other SBUs (Cash
Cows)Cows)
Unrealized future opportunitiesUnrealized future opportunities
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 6/19
Strategy RecommendationsStrategy Recommendations
InvestmentInvestmentDivestiture strategyDivestiture strategy
Reduce capacity to free up resourcesReduce capacity to free up resources
Cash FlowCash FlowGoal of Positive Cash FlowGoal of Positive Cash Flow
Negative Cash Flow = DivestmentNegative Cash Flow = Divestment
No real growth opportunitiesNo real growth opportunities
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 7/19
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 8/19
GE (nine cell matrix)
Classification
Marke
tA
ttractivene
ss
Strong Medium Weak
Low
Mediu
m
High
Business Strength
5.00 1.002.333.67
5.00
3.67
2.33
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 9/19
Annual market growth rateAnnual market growth rate
Overall market sizeOverall market size
Historical profit marginHistorical profit margin
Current size of marketCurrent size of market
Market structureMarket structure Market rivalryMarket rivalry
Demand variabilityDemand variability
Global opportunitiesGlobal opportunities
Market AttractivenessMarket Attractiveness
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 10/19
Current market shareCurrent market share
Brand imageBrand image
Brand equityBrand equity
Production capacityProduction capacity
Corporate imageCorporate image Profit margins relative to competitorsProfit margins relative to competitors
R & D performanceR & D performance
Managerial personalManagerial personal
Promotional effectivenessPromotional effectiveness
Business StrengthBusiness Strength
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 11/19
OverviewOverview
Business Strengths
Mark
et
Attractiven
ess
Low
High
LowHigh
Attractive
Moderate
Attractive
Unattractive
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 12/19
TATATATA
TATA
• IT (Information Technology) : TCS
• Consumer Durable : Automobiles,Titan etc.
•Textiles : Tata Fabrics, West Sides etc
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 13/19
GE Matrix For TATAGE Matrix For TATA
Business Strengths
MarketA
ttractiven
ess
Low
High
LowHigh
IT
Consumer
Durables
Textiles
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 14/19
BCG v/s GEBCG v/s GE
BCGBCG GEGE
Market GrowthMarket Growth
Market shareMarket share
4 cell4 cell
Multi ProductsMulti Products
Primary toolsPrimary tools
Market
Attractiveness
Market strength
9 cell
Multi Business
Units
Secondary tools
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 15/19
Basis of the BCG PortfolioBasis of the BCG Portfolio
MatrixMatrix
Time
Introductory Phase “?”
Growth Phase “Star”
S a l e s V ol um e
Mature Phase “Cash
Cow”
Decline Phase “Dog”
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 16/19
1616
Th t f S b tit tThreats of Substitutes El ti it fElasticity of
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 17/19
Threats of Substitutes =Threats of Substitutes = Elasticity of Elasticity of Demand Demand
Buyers propensity to substituteBuyers propensity to substituteBuyers switching costBuyers switching cost
Perceived value of differentiationPerceived value of differentiationEx: FMCG products, Mobile servicesEx: FMCG products, Mobile services
New Entrant =Competitors= PerfectNew Entrant =Competitors= Perfect
CompetitionCompetitionEntry barriers (patents, rights )Entry barriers (patents, rights )Learning CurveLearning CurveBrand EquityBrand Equity
Capital RequirementCapital RequirementGovernment policiesGovernment policiesStandardization & switching costStandardization & switching costExpected retaliation from incumbentExpected retaliation from incumbent
1717
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 18/19
Industry competition or rivalryIndustry competition or rivalryNo. of competitorsNo. of competitorsIndustry growth rateIndustry growth rate
Economics of scaleEconomics of scaleExit barriersExit barriersSustainable competitive advantage thru improvisationSustainable competitive advantage thru improvisation
Bargaining power of SuppliersBargaining power of SuppliersSwitching costSwitching costDegree of differentiation of inputsDegree of differentiation of inputsPresence of substitute inputsPresence of substitute inputsGroupismGroupism
Forward IntegrationForward Integration
1818
B i i P f BB i i P f B
8/8/2019 12.Session12 Matrix and Model
http://slidepdf.com/reader/full/12session12-matrix-and-model 19/19
Bargaining Power of BuyersBargaining Power of Buyers
Buyer to firm concentration ratioBuyer to firm concentration ratio
Buyers information availabilityBuyers information availability
Switching costSwitching cost
Prospects of backward integrationProspects of backward integration
Buyer’s purchasing sensitivityBuyer’s purchasing sensitivity
Availability of substitute productsAvailability of substitute products1919
Recommended