3. HBSCTC Class.

Quesrion 3
The BCG growth share matrix is old but has stood the test of time. How
significant and practicably usable it is today in the light of vast development in
management tools that help assess market conditions.

 The BCG growth share matrix, also known as the Boston Consulting Group
matrix, is a management tool that helps companies assess their product portfolio
and allocate resources accordingly and systematically.

 Share matrix was designed to help a business by considering business growth

opportunities by reviewing their portfolio of products to decide where to invest,
which products to develop or which ones to discontinue.
 The matrix was put forth by Bruce Henderson, in 1970 yet it remains a powerful
strategic tool for managing product portfolio amid the unpredictable and
dynamic business environment.
 The matrix is based on an analysis of market growth and relative market share
and is divided into four quadrant, as shown in the diagram below:

Stars:
- high market share and high market growth rate.
-These are products or business units that have a dominant position in a growing
market and require substantial investment to maintain their position.
EcoSure: This is a mobile insurance product that provides life and funeral cover to
customers. It has been a successful product for Econet Wireless and has contributed to
the company's growth.
-Moovar.

Cash Cow:
- high market share and low market growth rate.
-These are products or business units that have a dominant position in a mature
market and generate significant cash flow.
-Ecocash: Ecocash is a mobile payment platform that enables customers to send and
receive money, pay bills, and make purchases using their mobile phones. It has been a
successful product for Econet Wireless and has a dominant market share in the mobile
payments industry in Zimbabwe. As such, it may be considered a cash cow according
to the BCG matrix.
-Econet Wireless Networks: Econet Wireless Networks provides mobile network
services to customers in several African countries. While the mobile network industry
has shown some growth potential, Econet Wireless Networks may be considered a
cash cow due to its dominant position in the market and its ability to generate
significant cash flow for the company. recharge cards.
-Liquid Telecom: Liquid Telecom provides internet and data services to businesses
and individuals in several African countries. While the telecommunications industry
is competitive, Liquid Telecom may be considered a cash cow due to its established
position in the market and its ability to generate significant cash flow for the
company.

Problem child:
-low market share and high market growth rate.
-These are products or business units that have the potential to become stars, but
require significant investment to grow their market share.
--Based on industry trends, some Econet Wireless's products that may be considered
problem child or question marks include:
-Steward Bank: Econet Wireless operates a banking subsidiary, Steward Bank,
which provides a range of financial services to customers. While the banking industry
in Zimbabwe has shown some growth potential, Steward Bank may be considered a
question mark or problem child due to the high level of competition in the industry
and the potential for economic and regulatory challenges. It has experienced a high
market growth rate in the past years, yet it has a low relative market share because of
the level of competition in the industry.
-Solar Home Kits: Econet Wireless has launched a solar home kit product that
provides solar power to households in rural areas without access to electricity. While
there is potential for growth in this market, it may be considered a question mark or
problem child due to the challenges of reaching customers in remote areas and the
potential for regulatory and infrastructure challenges.

Dogs:
-low market share and low market growth rate.
-These are products or business units that have a weak position in a declining market
and generate little or no profit.
-EcoFarmer: Econet Wireless has launched a digital platform that provides
agricultural information and services to farmers. While there is potential for growth in
the agricultural industry, this product may be considered a dog if it is not generating
significant revenue or market share.
-Power & Energy: Econet Wireless has a division that provides energy solutions,
including solar-powered generators, to businesses and households. While there is
potential for growth in this market, this business unit may be considered a dog if it is
not generating significant revenue or market share.
-Solar Distribution: Econet Wireless has a subsidiary that distributes solar panels
and related equipment to households and businesses. While there is potential for
growth in the renewable energy market, this business unit may be considered a dog if
it is not generating significant revenue or market share.
Kwese TV: This is a satellite television service that offers a range of channels and
programming. It has been successful in expanding Econet Wireless's presence in the
media and entertainment industry.
-Sasai.

How can Econet Improve its market share?

-Inoovation
-Marketing and advertising. Through Road shows and radio programs, Like the
popularly know Steward bank Kwenga and Road shows on National FM.
-Partnerships and collaborations.
-Customer service and satisfaction.
-Pricing and promotions. Free call minutes by Econet, Cheap night bundles.

What are other investments that can maintain Ecocash as a cash cow?
-Contact-less payments.
-Peer to peer lending within the platform.
-Digital wallets. Provide all services in one wallet.
-Integration with other services, eg banks, Emhare, by Ecocash.
-Digital currencies

The importance or usefulness of the matrix to Econet Wireless.

-The BCG matrix can be a useful tool for a company to evaluate its product portfolio
and make strategic decisions. However, its significance and practical usability depend
on several factors.

-Firstly, the BCG matrix can help a company to identify which products or business
units are generating the most revenue and which require further investment or
divestment. By investing in products with high growth potential (stars and question
marks) and divesting products with low growth potential (dogs), Econet Wireless can
maximize its profitability and market share.
 It is simple to implement and easy to understand.

Larger companies can use it for the seeking volume and experience effects.
It predicts the future actions of a company. Hence, the company can decide
its proper management strategy.

 Helpful for managers to evaluate balance in the firm’s current portfolio of

Stars, Cash Cows, Question Marks, and Dogs
 The matrix indicates that the profit of the company is directly related to its
market share. Therefore, a company can increase market share if it seems
profitable.
 It has only four categories that make it in simple form to operate efficiently.

-However, the BCG matrix has its limitations:

 BCG matrix classifies businesses as low and high, but generally, businesses
can be medium also. Thus, the true nature of the business may not be
reflected.
 The distinction between high and low is highly subjective.
 The use of BCG analysis cannot help managers take into account synergies
that may possibly exist among the various SBUs within the product
portfolio.
 The market is not clearly defined in this model.
 The problems of getting data on the market share and market growth.
 The framework assumes that each business unit is independent of the others.
-It also does not take into account external factors such as technological
advancements or changes in consumer preferences.
Therefore, it is important for Econet Wireless to use the BCG matrix in conjunction
with other management tools and techniques that help assess market conditions.
For example, Econet Wireless can use Porter's Five Forces analysis to evaluate the
competitive landscape in its industry, conduct market research to understand
consumer preferences and trends, and use scenario planning to anticipate and prepare
for potential changes in the market.

These alternatives are explained below in greater depth.

Alternatives.
In today's business environment, there are many other management tools and
techniques available that can complement the BCG matrix.
-Market research: Econet Wireless conducts market research to understand customer
needs and preferences, as well as market trends and competition. This helps the
company to identify opportunities for growth and innovation.
-Econet Wireless uses financial analysis. to evaluate the performance of its products
and business units. This includes analyzing revenue and profitability, as well as trends
in customer acquisition and retention.
-SWOT analysis: Econet Wireless uses SWOT analysis to identify its strengths,
weaknesses, opportunities, and threats. This helps the company to develop strategies
that leverage its strengths and opportunities while mitigating its weaknesses and
threats.
-Scenario planning: Econet Wireless uses scenario planning to anticipate and prepare
for potential changes in the market. This involves developing multiple scenarios based
on different assumptions and outcomes, and identifying potential risks and
opportunities.
-Product life cycle analysis: Econet Wireless uses product life cycle analysis to
evaluate the stage of maturity of its products and determine appropriate strategies for
each stage. This includes identifying potential opportunities for product development,
as well as divestment strategies for products that are reaching the end of their life
cycle.
-
Conclusion.
Although the BCG matrix is old, it is still significant and practically usable in today’s
industries to evaluate business units and make strategic decisions. Its simplicity and
ease of use make it a valuable tool for companies, especially those with a large
product portfolio like Innscor Africa and Econet Group of companies. However, for
effective strategic decision making, the BCG matrix must not be used in isolation, it
must e complemented by other tools like the SWOT analysis, the Porter’s 5 forces
model, PESTEL analysis and other factors, to effectively determine company
competitiveness and market attractiveness.