- 1
- 2
- 3
- 4
- 5
- 6
- 7
- 8
- 9
- 10
- 11
- 12
- 13
- 14
- 15
- 16
- 17
- 18
- 19
- 20
- 21
- 22
- 23
- 24
- 25
- 26
- 27
- 28
- 29
- 30
- 31
- 32
- 33
- 34
- 35
- 36
- 37
- 38
- 39
- 40
BCG Matrix and VRIO Framework for CMGI Organizational and Market Innovation
Posted by Sophia Morgan on Jul-30-2018
BCG Matrix
The BCG matrix is a strategic management tool that was created by the Boston Consulting Group, which helps in analysing the position of a strategic business unit and the potential it has to offer. The matrix consists of 4 classifications that are based on two dimensions. These first of these dimensions is the industry or market growth. The other of these dimensions is the relative market share of the strategic business unit. Strategic business units are placed in one of these 4 classifications. The BCG matrix for CMGI Organizational and Market Innovation will help decide on the strategies that can be implemented for its strategic business units.
Strategic business units with high market growth rate and high relative market share are called stars. Businesses should invest in their stars and can implement vertical integration, market penetration, product development, market development, and horizontal integration strategies. Strategic business units with high market growth rate and low relative market share are called question marks. These strategic business units require close considerations whether the business should continue with them or divest. Strategic business units with low market growth rate but with high relative market share are called cash cows. The business should invest in these to maintain their relative market share. Lastly, the strategic business units with low market growth rate and low relative market share are called dogs. The business should divest these strategic business units.
BCG Matrix of CMGI Organizational and Market Innovation
The BCG Matrix for CMGI Organizational and Market Innovation will help CMGI Organizational and Market Innovation in implementing the business level strategies for its business units. The analysis will first identify where the strategic business units of CMGI Organizational and Market Innovation fall within the BCG Matrix for CMGI Organizational and Market Innovation.
Stars
- The financial services strategic business unit is a star in the BCG matrix of CMGI Organizational and Market Innovation. It operates in a market that shows potential in the future. CMGI Organizational and Market Innovation earns a significant amount of its income from this SBU. CMGI Organizational and Market Innovation should vertically integrate by acquiring other firms in the supply chain. This will help it in earning more profits as this Strategic business unit has potential.
- The Number 1 brand Strategic business unit is a star in the BCG matrix of CMGI Organizational and Market Innovation, and this is also the product that generates the greatest sales amongst its product portfolio. The potential within this market is also high as consumers are demanding this and similar types of products. CMGI Organizational and Market Innovation should undergo a product development strategy for this SBU, where it develops innovative features on this product through research and development. This will help CMGI Organizational and Market Innovation by attracting more customers and increases its sales.
- The Number 2 brand Strategic business unit is a star in the BCG matrix of CMGI Organizational and Market Innovation as CMGI Organizational and Market Innovation has a 20% market share in this category. It also the market leader in this category. The overall category is expected to grow at 5% in the next 5 years, which shows that the market growth rate is expected to remain high. CMGI Organizational and Market Innovation should use its current products to penetrate the market. This could be done by improving its distributions that will help in reaching out to untapped areas. This will help increase the sales of CMGI Organizational and Market Innovation.
Cash Cows
- The supplier management service strategic business unit is a cash cow in the BCG matrix of CMGI Organizational and Market Innovation. This has been in operation for over decades and has earned CMGI Organizational and Market Innovation a significant amount in revenue. The market share for CMGI Organizational and Market Innovation is high, but the overall market is declining as companies manage their supplier themselves rather than outsourcing it. The recommended strategy for CMGI Organizational and Market Innovation is to stop further investment in this business and keep operating this strategic business unit as long as its profitable.
- The Number 3 brand strategic business unit is a cash cow in the BCG matrix of CMGI Organizational and Market Innovation. This is an innovative product that has a market share of 25% in its category. CMGI Organizational and Market Innovation is also the market leader in this category. The overall category has been declining slowly in the past few years. CMGI Organizational and Market Innovation has the power to influence the market as well in this category. It should, therefore, invest in research and development so that the brand could be innovated. This will help the category grow and will turn this cash cow into a star. The overall benefit would be an increase in sales of CMGI Organizational and Market Innovation.
- The international food strategic business unit is a cash cow in the BCG matrix for CMGI Organizational and Market Innovation. This business unit has a high market share of 30% within its category, but people are now inclined less towards international food. This change in trends has led to a decline in the growth rate of the market. The recommended strategy for CMGI Organizational and Market Innovation is to invest enough to keep this strategic business unit under operations. If it no longer remains profitable and turns into a dog, then CMGI Organizational and Market Innovation should divest this strategic business unit.
Question Marks
- The local foods strategic business unit is a question mark in the BCG matrix for CMGI Organizational and Market Innovation. The recent trends within the market show that consumers are focusing more towards local foods. Therefore, this market is showing a high market growth rate. However, CMGI Organizational and Market Innovation has a low market share in this segment. The recommended strategy for CMGI Organizational and Market Innovation is to invest in research and development to come up with innovative features. This product development strategy will ensure that this strategic business unit turns into a cash cow and brings profits for the company in the future.
- The Number 4 brand strategic business unit is a question mark in the BCG matrix for CMGI Organizational and Market Innovation. This strategic business unit is a part of a market that is rapidly growing. However, this strategic business unit has been incurring losses in the past few years. It has also failed in the attempts made at innovation by research and development teams. The recommended strategy for CMGI Organizational and Market Innovation is to divest and prevent any future losses from occurring.
- The confectionery strategic business unit is a question mark in the BCG matrix for CMGI Organizational and Market Innovation. The confectionery market is an attractive market that is growing over the years. However, CMGI Organizational and Market Innovation has a low market share in this attractive market. The low sales are as a result of low reach and poor distribution of CMGI Organizational and Market Innovation in this segment. The recommended strategy for CMGI Organizational and Market Innovation is to undergo market penetration, where it pushes to make its product present on more outlets. This will ensure increased sales for CMGI Organizational and Market Innovation and convert this strategic business unit into a cash cow.
Dogs
- The plastic bags strategic business unit is a dog in the BCG matrix of CMGI Organizational and Market Innovation. This strategic business unit has been in the loss for the last 5 years. It also operates in a market that is declining due to greater environmental concerns. The recommended strategy for CMGI Organizational and Market Innovation is to divest this strategic business unit and minimise its losses.
- The Number 5 brand strategic business unit is a dog in the BCG matrix for CMGI Organizational and Market Innovation. This is operating in a market segment that is declining in the past 5 years. The company also has negative profits for this strategic business unit. However, it is expected that the market will grow in the future with environmental changes that are occurring. The recommended strategy for CMGI Organizational and Market Innovation is to invest in the business enough to convert into a cash cow. This will ensure profits for CMGI Organizational and Market Innovation if the market starts growing again in the future.
- The synthetic fibre products strategic business unit is a dog in the BCG matrix of CMGI Organizational and Market Innovation. The market for such products has been declining, and as a result of this decline, CMGI Organizational and Market Innovation has been facing a loss in the past 3 years. The market share for it is also less than 5%. The recommended strategy for CMGI Organizational and Market Innovation is to divest this strategic business unit to minimise any further losses.
- The artificially flavoured products strategic business unit is a dog in the BCG matrix for CMGI Organizational and Market Innovation. These products were launched recently, with the prediction that this segment would grow. However, with increasing health consciousness, people are now refraining from consumption of artificial flavours. The market is shrinking, and CMGI Organizational and Market Innovation has no significant market share. The recommended strategy for CMGI Organizational and Market Innovation is to call back this product.
Some of the strategic business units identified in the BCG matrix for CMGI Organizational and Market Innovation have the potential of changing from their current classification. For example, a dog changing to a cash cow. These have been identified in the BCG matrix of CMGI Organizational and Market Innovation and recommended strategies to ensure such change have also been made.
VRIO Framework
The VRIO Framework or VRIO analysis is a strategic management tool that is used to analyse a firm’s internal strengths and resources. It helps identify which one of its internal strengths and resources can be a source of sustained competitive advantage. The analysis is based on the idea that a firm’s internal resources are a source of sustained competitive advantage if they are valuable, rare, cannot be imitated by competition, and are organised to capture value for the organisation. The VRIO analysis requires looking at a firm's resources based on these 4 factors.
Based on the analysis, each resource can either provide a sustained competitive advantage, has a good competitive advantage, temporary competitive advantage, competitive parity or competitive disadvantage. A sustained competitive advantage exists when a resource is valuable, rare, non-imitable and organised. A good competitive advantage occurs if it is valuable, rare, and non-imitable. A temporary competitive advantage exists if it is valuable and rare. A competitive parity occurs if it is only valuable. Lastly, the resource is a competitive disadvantage if it is neither of the 4. The analysis takes place in this order by first assessing whether a resource is valuable, rare, imitable and organised.
References
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of management, 17(1), 99-120.
Barney, J. (2002). Gaining and Sustaining Competitive Advantage, 2nd ed. Prentice Hall, Upper Saddle River, NJ.
Cardeal, N., & Antonio, N. S. (2012). Valuable, rare, inimitable resources and organization (VRIO) resources or valuable, rare, inimitable resources (VRI) capabilities: What leads to competitive advantage?
Hambrick, D. C., MacMillan, I. C., & Day, D. L. (1982). Strategic attributes and performance in the BCG matrix—A PIMS-based analysis of industrial product businesses. Academy of Management Journal, 25(3), 510-531.
Jurevicius, O. (2013a). VRIO Framework. Retrieved from https://www.strategicmanagementinsight.com/tools/vrio.html
Jurevicius, O. (2013b). BCG growth-share matrix. Retrieved from https://www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html
Knott, P. J. (2015). Does VRIO help managers evaluate a firm’s resources? Management Decision, 53(8), 1806-1822.
Seeger, J. A. (1984). Research note and communication. Reversing the images of BCG's growth/share matrix. Strategic Management Journal, 5(1), 93-97.
Smith, M. (2002). Derrick's Ice–Cream Company: applying the BCG matrix in customer profitability analysis. Accounting education, 11(4), 365-375.
Warning! This article is only an example and cannot be used for research or reference purposes. If you need help with something similar, please submit your details here.
Carly Marvin
5.0
On-time delivery and no extra fees for revision. How can a student wish for something else. Thanks!
Lina Farhad
5.0
Very reliable service! I'm a satisfied client of this company. These guys are really best!
Emelia Hoggan
5.0
Hello guys! I’ve just got my term paper and it’s very good. Excellent service and communication is always here. By the way, I have personal contact with the expert who always guides me regarding any topic—highly recommended!
Romeo Edouard
4.0
This service was prompt, effective and reasonably priced. They made the paper much better. Much thanks!
Next Articles
- SolidWorks Bcg Matrix
- Wireless Telecom Workbook Instructions, An Excel Model Bcg Matrix
- Cisco: Early If Not Elegant (B) Bcg Matrix
- Bang Networks, Inc. Bcg Matrix
- Zenglibao: An Internet Money Market Fund Run By Tianhong Asset Management Co., Ltd. Bcg Matrix
- MiCRUS: Activity Based Management For Business Turnaround Bcg Matrix
- Scott Lawson's Dilemma Bcg Matrix
- Alphatec Electronics Pcl Bcg Matrix
- Lending Club Bcg Matrix
- Xedia And Silicon Valley Bank (A) Bcg Matrix
Previous Articles
- Compensation And Performance Evaluation At Arrow Electronics Bcg Matrix
- Sub Micron Devices, Inc. Bcg Matrix
- Siebel Systems: The Role Of The CFO Bcg Matrix
- Honeywell, Inc. And Integrated Risk Management, Spanish Version Bcg Matrix
- B&K Distributors: Calculating Return On Investment For A Web Based Customer Portal Bcg Matrix
- Cypress Semiconductor: 1.25% Convertible Notes Bcg Matrix
- ScotiaMcLeod Equity Trading: The Quantex Decision Bcg Matrix
- Kyocera Corp.: The Amoeba Management System Bcg Matrix
- Aspen Technology, Inc.: Currency Hedging Review, Spanish Version Bcg Matrix
- Intel Pentium Chip Controversy (A) Bcg Matrix
Be a great writer or hire a greater one!
Academic writing has no room for errors and mistakes. If you have BIG dreams to score BIG, think out of the box and hire Case48 with BIG enough reputation.
Our Guarantees
Interesting Fact
Most recent surveys suggest that around 76 % students try professional academic writing services at least once in their lifetime!