Bcg Matrix Analysis

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TOOLS AND TECHNIQUES OF STRATEGIC MANAGEMENT 1) Critical Question Analysis – Critical question analysis involves a process of answering few specific sequential questions. This method of formulating strategy helps in synthesizing several ideas by finding accurate answers to those basic questions. Each questions aims at exploring various organizational aspects so that they are well defined. Those basic questions under critical question analysis are – 1) What are the purpose(s) and objectives of the organization? The answer to this question will state the aim or vision of the organization. It will make it clear where the organization wants to go. 2) Where is the organization presently going? This question’s answer will state that how effective…show more content…
ii.The company can take effective decisions based on the characteristics and nature of the SBUs. iii.BCG matrix can be applied while formulating strategy as different SBUs will be having different strategies to make it profitable. iv.Its application in strategic management will help the organization to keep itself updated with the changing environment, technology and customer’s needs as it involves market analysis. v.Highly cash generating units in the business can be…show more content…
vii.Application of BCG matrix will also result in cash generation by liquidating its non-profitable business units. Pitfalls of BCG growth matrix – i.It does not consider various risks associated with product development. ii.Impact of change in economic conditions on SBUs is ignored. iii.It only considers market growth with its immediate competitors. iv.There is no clear definition what constitutes the ‘market’. 3) GE Multifactor Portfolio Matrix – This matrix was developed by a leading consulting group, the General Electric Company with the help of Mckinsey and Company. GE multifactor portfolio matrix overcomes the drawbacks of BCG matrix. Like BCG matrix it is also based on two dimensions but unlike BCG matrix, these dimensions are a composite of a variety of factors. The two dimensions are – Market/Industry Attractiveness and Business Strengths. Industry attractiveness might comprise of following factors – No. of competitors in the industry Rate of industry growth Weakness of competitors within an industry Business strengths might comprise of following factors – Companies solid financial

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