BOSTON COSULTING GROUP

CONCEPT OF COMPETITIVE ANALYSIS AND CORPORATE STRATEGY

TEAM MEMBERS
 Samreen Tariq  Abdul Wasae     

Shaikh Ahmed Waqar Hina Mustafa Nazish Siddiqui Hardesh Kumar Hira Zeeshan Channa

     

Shehzina Nafees Rubab Naqvi Marium Arif Jafri Ali Bilawal Khan Faizan Shehzad Tariq Bin Aijaz

INTRODUCTION
 BCG Idea
 Firms with diversified portfolio can

channelize their resources to most efficient and productive units.  Each product and division can be assigned a role.  Individual roles can be integrated into portfolio strategy.

MARKETS

STRATEGIES

 High growth market  Increase market share     Low growth Market  Focus on cash flows

at the cost of losing market share

CRITERIA FOR CHOOSING DOMINANCE STRATEGY
 Assessment of competitive strength  Cost of gaining market leadership  Mission of cash generation rather than

sales growth

PORTFOLIO STRATEGY
 Market growth  Market share

(External; Non controllable) (Controllable)

ASSUMPTIONS OF PORTFOLIO STRATEGY
 Margins and cash generation depends

on the market share  Growing market requires cash inputs to maintain market share  Increasing market share requires budgets for advertising expense, plant and equipment etc.  Growth declines as product reaches maturity

PRODUCT LIFE CYCLE AND BCG
 In BCG growth dies as product reaches

maturity

  

Star products Question marks vertically

Cash cows Dog

Falling

PRODUCT DYNAMICS
PROD UCT MARK ET GROW TH RATE

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SUCCESS SEQUENCE

$ $

DISASTER SEQUENCE

X X

RELATIVE MARKET SHARE

COMPETITIVE ANALYSIS
1.Internal balance
 Check whether products are appropriately

distributed among four quadrants

2.Trend
 Develop an early period portfolio (3-6 years),

compare it with the current portfolio and analyze general directions and movements of products (trends)

3.Competitive evaluation
 Portfolio of major competitors must be

developed and compared with internal portfolio for competitive advantage

Cont’d

COMPETITIVE ANALYSIS

4.Industry position
 Appropriate strategy should be obtained

by plotting market growth against the company’s own product’s growth

6.Financial balance
 Quantitative strategy decisions are revised

and formed up on the basis of detailed cash flow calculations

TAKEAWAYS
1.Market leader may be inefficient cash producer 2.Cash generation and market share are directly related 3.Market share and profitability relationship may also be obscure if improper analysis and segmentation is done 4.The long range horizon is quite evident, it is not just the technique for making short term adjustments

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