Planning techniques
3 planning techniques adopted for planning the business strategy are:
Boston Consultancy Group Matrix.
According to the BCG matrix, companies’ business units can be categorized into 4 categories. These categories are based on the amalgamations of market share and market growth relative to the biggest competitor. Based on BCG matrix, it is very good for the company when its products have large market share or the product’s market is growing very fast.
The Boston Consulting Group Portfolio Matrix Stars indicate that the business or the product has high market share and high growth.
• Large amount of money are invested and so these businesses/products are expected to generate considerable amount of cash. They are the leaders in that particular business.
• Usually approximately in balance on net cash flow. Nevertheless, if any effort is needed to be made to keep the share it should been done because if the market share is maintained then the returns will be a cash cow.
Cash cows are companies or products which have low market growth and high market share.
• These are mature and successful businesses with high profit and cash generation
• There is little need for investment because of the low growth.
Dogs represent companies or products which have low growth and low market share.
• These businesses neither generate nor consume a large amount of money.
• The number of dogs in a company should be avoided and minimized.
Question marks display organizations or products with high growth and low market share.
• Question marks require huge amount of investment and have low returns because the market share is low.
• If the market share stays low than question marks will constantly demand large amounts of money and as the growth terminates, they will convert in a dog.
• However, if the market share increases then the question marks may return into a star and ultimately a cash cow as the market growth slows.
The BCG Matrix Method helps to understand a
Boston Consultancy Group Matrix.
According to the BCG matrix, companies’ business units can be categorized into 4 categories. These categories are based on the amalgamations of market share and market growth relative to the biggest competitor. Based on BCG matrix, it is very good for the company when its products have large market share or the product’s market is growing very fast.
The Boston Consulting Group Portfolio Matrix Stars indicate that the business or the product has high market share and high growth.
• Large amount of money are invested and so these businesses/products are expected to generate considerable amount of cash. They are the leaders in that particular business.
• Usually approximately in balance on net cash flow. Nevertheless, if any effort is needed to be made to keep the share it should been done because if the market share is maintained then the returns will be a cash cow.
Cash cows are companies or products which have low market growth and high market share.
• These are mature and successful businesses with high profit and cash generation
• There is little need for investment because of the low growth.
Dogs represent companies or products which have low growth and low market share.
• These businesses neither generate nor consume a large amount of money.
• The number of dogs in a company should be avoided and minimized.
Question marks display organizations or products with high growth and low market share.
• Question marks require huge amount of investment and have low returns because the market share is low.
• If the market share stays low than question marks will constantly demand large amounts of money and as the growth terminates, they will convert in a dog.
• However, if the market share increases then the question marks may return into a star and ultimately a cash cow as the market growth slows.
The BCG Matrix Method helps to understand a