VISION STATEMENT

The Charts That

Changed World
Presented by:
Hairin Nisa bt. Meor Nordin
• The issue of HBR (Harvard Business Review) contains
about 20 charts, graphs and other exhibits.

• What is the purpose?

To communicate the ideas of contributors with the hope
to augment readers’ understanding.

• Five charts to be presented.

1st Chart: The Growth Share
Matrix
 The Growth Share Matrix
• A framework to help companies think about the priority (and
resources) that they should give to their different businesses.
• This framework first developed by the Boston Consulting
Group (BCG) in the 1960s
• It puts each of a firm's businesses into one of four categories.
The categories were all given memorable names—cash cow,
star, dog and question mark—which helped to push them into
the collective consciousness of managers all over the world.
• The two axes of the matrix are relative market share (or the
ability to generate cash) and growth (or the need for cash).
• Cash cows are businesses that have a high market share (and
are therefore generating lots of cash) but low growth prospects
(and therefore a low need for cash). They are often in mature
industries that are about to fall into decline.

• Stars have high growth prospects and a high market share.

• Question marks have high growth prospects but a

comparatively low market share (and have also been known as
wild cats).

• Dogs, by deduction, are low on both growth prospects and

market share.
• The conclusions drawn from such an analysis
are to transfer the surplus cash from a
conglomerate's cash cows to the stars and the
question marks, and to close down or sell off
the dogs.
• In the end, question marks reveal themselves as
either dogs or stars, and cash cows become so
drained of finance that they inevitably turn into
dogs.
2nd Chart: The Experience Curve
 The Experience Curve
• It is a graphical representation of the phenomenon
explained in the mid-1960s by Bruce D.
Henderson, founder of the Boston Consulting
Group.
• It refers to the effect that firms learn from doing,
which means that the higher the cumulative
volume of production (X), the lower the direct cost
per new unit produced (C).
• Therefore, the experience curve will be convex
and have a downward slope, as shown in the
adjacent diagram
3 Chart: The Five Forces
rd
Porter's framework consists of five fundamental competitive
forces:

1. Entry of competitors
assessing the ability of new entrants to start operations and the
structural barriers they must overcome;
2. Threat of substitutes
assessing the ability of new products with superior characteristics to
replace existing product(s) or service(s);
3. Bargaining power of buyers
assessing the relative strength and number of buyers;
4. Bargaining power of suppliers
assessing the relative strength and number of sellers;
5. Rivalry among the existing players
assessing the relative competitive strength of rival firms.
4th Chart: Disruptive Innovation
 Disruptive Innovation

• It is the introduction of new technologies, products or services

in an effort to promote change and gain advantage over the
competition. In this context, the word disruptive does not
mean to interrupt or cause disorder -- it means to replace.
• In the enterprise, disruptive innovation can be risky because it
requires employees to embrace a radically different approach
to product development or marketing.
• Often a product out of the box thinking, disruptive changes
can initially seem out of step with contemporary preferences
but prove successful in their ability to create new market
opportunities where none existed before. Modern examples of
disruptive innovation include the development of mobile
cellular telephones, digital cameras and e-book readers.
5 Chart: The Market Pyramid
th
 The Market Pyramid
• It was introduced by C.K. Prahalad and
Kenneth Lieberthal in HBR in 1998
• When large western companies rushed to enter emerging
markets 20 years ago, they were guided by a narrow and often
arrogant perspective.
• They target relatively affluent buyers and they forgot the very
real opportunity to reach much larger market further down the
socioeconomic pyramid.
• People living on $5,000 to $10,000 a year may not sound like
lucrative consumers, but they constitute a demographic of
immense purchasing power for companies selling food,
housing, or energy.