- 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 The Xiangyang Market
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 The Xiangyang Market 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 The Xiangyang Market
The BCG Matrix for The Xiangyang Market will help The Xiangyang Market in implementing the business level strategies for its business units. The analysis will first identify where the strategic business units of The Xiangyang Market fall within the BCG Matrix for The Xiangyang Market.
Stars
- The financial services strategic business unit is a star in the BCG matrix of The Xiangyang Market. It operates in a market that shows potential in the future. The Xiangyang Market earns a significant amount of its income from this SBU. The Xiangyang Market 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 The Xiangyang Market, 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. The Xiangyang Market should undergo a product development strategy for this SBU, where it develops innovative features on this product through research and development. This will help The Xiangyang Market by attracting more customers and increases its sales.
- The Number 2 brand Strategic business unit is a star in the BCG matrix of The Xiangyang Market as The Xiangyang Market 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. The Xiangyang Market 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 The Xiangyang Market.
Cash Cows
- The supplier management service strategic business unit is a cash cow in the BCG matrix of The Xiangyang Market. This has been in operation for over decades and has earned The Xiangyang Market a significant amount in revenue. The market share for The Xiangyang Market is high, but the overall market is declining as companies manage their supplier themselves rather than outsourcing it. The recommended strategy for The Xiangyang Market 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 The Xiangyang Market. This is an innovative product that has a market share of 25% in its category. The Xiangyang Market is also the market leader in this category. The overall category has been declining slowly in the past few years. The Xiangyang Market 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 The Xiangyang Market.
- The international food strategic business unit is a cash cow in the BCG matrix for The Xiangyang Market. 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 The Xiangyang Market is to invest enough to keep this strategic business unit under operations. If it no longer remains profitable and turns into a dog, then The Xiangyang Market should divest this strategic business unit.
Question Marks
- The local foods strategic business unit is a question mark in the BCG matrix for The Xiangyang Market. 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, The Xiangyang Market has a low market share in this segment. The recommended strategy for The Xiangyang Market 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 The Xiangyang Market. 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 The Xiangyang Market is to divest and prevent any future losses from occurring.
- The confectionery strategic business unit is a question mark in the BCG matrix for The Xiangyang Market. The confectionery market is an attractive market that is growing over the years. However, The Xiangyang Market has a low market share in this attractive market. The low sales are as a result of low reach and poor distribution of The Xiangyang Market in this segment. The recommended strategy for The Xiangyang Market is to undergo market penetration, where it pushes to make its product present on more outlets. This will ensure increased sales for The Xiangyang Market 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 The Xiangyang Market. 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 The Xiangyang Market 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 The Xiangyang Market. 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 The Xiangyang Market is to invest in the business enough to convert into a cash cow. This will ensure profits for The Xiangyang Market if the market starts growing again in the future.
- The synthetic fibre products strategic business unit is a dog in the BCG matrix of The Xiangyang Market. The market for such products has been declining, and as a result of this decline, The Xiangyang Market has been facing a loss in the past 3 years. The market share for it is also less than 5%. The recommended strategy for The Xiangyang Market 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 The Xiangyang Market. 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 The Xiangyang Market has no significant market share. The recommended strategy for The Xiangyang Market is to call back this product.
Some of the strategic business units identified in the BCG matrix for The Xiangyang Market 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 The Xiangyang Market 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.
Antoine Herve
5.0
The paper was well organized with abstract, intro, literature review, methodology, discussion and all-inclusive findings. Thanks a lot!
Paul Almes
5.0
It's really an unbelievable thing that the good people still exist like the staff of this service that is all the time available for the answer to any queries and revision. Highly recommended!
William Nicolan
5.0
A fair company to keep your trust in. I was bust at the end of the semester but this company formulated a good paper for me. Thank you!
Xie Tung
4.0
The document was satisfactory and I'll try this service for the research paper—full suggestion to appoint this company.
Next Articles
- J.C. Penney (B) Bcg Matrix
- Hedging Currency Risk At TT Textiles Bcg Matrix
- Oriflame S.A. (B) Bcg Matrix
- Disrupting Wall Street: High Frequency Trading Bcg Matrix
- Travelers Mortgage Securities CMO Bcg Matrix
- The Congressional Oversight Panel's Valuation Of The TARP Warrants (B) Bcg Matrix
- Fischer Francis Trees & Watts Bcg Matrix
- Salomon And The Treasury Securities Auction Bcg Matrix
- The Financial Crisis Of 2007 2009: The Road To Systemic Risk Bcg Matrix
- Fremont Financial Corp. Bcg Matrix
Previous Articles
- Crisis In Cyprus: Was It Different This Time? Bcg Matrix
- Bank Reform In China: What It Means For The World Bcg Matrix
- ISS A/S (A) Bcg Matrix
- Citicorp 1985 Bcg Matrix
- Citibank Hong Kong: Capital Arbitrage In The Emerging Markets Bcg Matrix
- Ben S. Bernanke In 2005 Bcg Matrix
- The Siam Commercial Bank: Weathering The Asian Storm (B) Bcg Matrix
- Alan Greenspan In 2004 Bcg Matrix
- Currency Crises In The United Kingdom And Hong Kong Bcg Matrix
- Foreign Exchange Markets And Transactions 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!