Transcript: Stars -Cash Cows serve as the money powerhouse to the company while they continue to expand and invest in other units. -They provide a great supply of profits, with just enough investment to hold it at the operating level it is at. -Cash cows are very important in keeping the company supplied with money while they compete in the environment. -A matrix that is used to categorize a company's strategic business units (SBU) based off the market attractiveness for the product, and the company's strength in the market. Question Marks -Dogs are the least favorable stage for the SBU. -There is little demand for the business unit, providing very little or no profits. -The company must decide whether to continue investing in it, or sell it out before they start taking losses. -Dogs can rarely be cycle back to stars or cash cows, so it is usually wise to sell it out and use the funds to invest in more potential units. Dogs Cash Cows -Stars are SBU's in a very attractive market, and the company has great strength in the market (the ideal combination). -Stars continue to grow in profit as the market demand increases, resulting in heavier investments to keep up with the demands. -Stars peak in profits, and then phase into cash cows, giving the company a steady stream of profits. BCG- Growth Share Matrix -SBU's that are question marks are very tricky because they are in a very attractive market, but the company does not have very much strength in it. -Must decide which ones to keep and invest in, potentially turning into profitable investments (stars), and which ones to let die off. -These hold the most variability to turn SBU's into huge profits, or take great losses trying to.
Transcript: Benefits and Limitations The BCG Growth-Share Matrix But they are CASH TRAPS! High Growth and High Market Share Benefits... Low Cash Cows High Market Growth Rate Low Market Share Our comparison will be based off of Market growth (Cash Usage) Market Share (Cash Generation) High These SBU's are growing rapidly but do not generate a lot of cash Cash Cows should be "Milked" and the extra money should be used to invest in other areas. Bibliography of using the BCG Growth Matrix A different way to use this model... For this reason a company may choose to no longer invest in this SBU. Relative Market Share (Cash Generation) High Market Growth Rate (Cash Usage) Had a Brilliant Idea! Can you correctly place these products under the right category? #$$# Question Marks and Dogs Effective for Resource Allocations. Helps a company find a balance between its vision, programs and procedures. Useful for an Internal Analysis Helps discover what SBU a company should invest and and what ones they should discontinue. A company should strive to have these SBU's in their organization. These SBU does not create or use large amounts of cash. Question Marks The BCG Growth-Share Matrix in real life... Has a very narrow focus. Assumes each SBU is independent and does not consider synergy. Market Share is not the only growth determinant. No clear universal definition of "market" Let's create a Portfolio Planning Model that organizes the company's Strategic Business Unites (SBU) into 4 simple categories. Early 1970's! Dogs How it is organized: This means they generate a lot of cash but at the same time use up a lot of cash because of their high growth rate. BCG Positions throughout the Product Life Cycle: Stars and Cash Cows Low Market Growth Rate High Market Share Market Growth Rate (Cash Usage) High By: Noel Granger Your Turn... This means Cash Cows generate a lot of cash because... ROA > Market Growth Rate Low Market Share and Low Growth Rate Low It adds a new element, SBU size. Limitations... BCG Postions and Strategy. (n.d.). Retrieved September 20, 2012, from mrdashboard: www.mrdashboard.com/BDC_Matrix.html Nager, F. J. (2008, July 6). Cows and Dogs in a Bear Market: Applying the BCG Matrix to Marketing. Retrieved September 23, 2012, from Atomic Tango: http://atomictango.com/2008/07/06/bcgmatrix/ Srivastava, R., & Prakash, A. (2011). Growth-Share Matrix as a Tool for Portfolio Planning: Evidence from the Indian Telecommunication Services Industry. IUP Journal of Business Stategy, 22-23. The BCG Growth-Share Matrix. (n.d.). Retrieved September 6, 2012, from NetMBA: www.netmba.com/strategy/matrix.bcg/ High Stars They must analyze these SBUs: Is the unit worth the investment to increase market share? The Boston Consulting Group Low Low Relative Market Share (Cash Generation)
Transcript: The demand for house construction and demand for commercial and industrial building construction are two factors that affect the hardware wholesaling market in the future. Ju-Min Kim C3171757 Junyi Li C3191551 Thao Thanh Tran C3159415 Yuxin Zhang C3180394 Bunnings Conclusion Bunnings Swimming Pool and Spa Water Testing now available for free Mitre 10 Macro environment Trend help corporations to analyze their business units 4 types Cash cows is where a company has high market share in a slow-growing industry. Dogs are units with low market share in a mature, slow-growing industry. Question marks are business operating in a high market growth, but having a low market share. Stars are units with a high market share in a fast-growing industry High price Low price 1. Introduction 2. Growth about Mitre 10 3. Mitre's current macro marketing trends, competitive environment and customer and market situation 4. Porter's Five Forces 5. Sources of advantage 6. positional advantage 7. Marketing Mix 8. Conclusion Reference High quality -Threat of New Entrants. Low -Threat of Substitute Products. Medium -Intense Rivalry Among Competitors. High -Bargaining power of Suppliers. High -Bargaining power of Buyers. Medium Hardware Industry in Australia Mitre 10 Alliance-Based and Supply Chain Resources and Capabilities Ace suppliers Code-sharing Partnership with Accent, Grilled, Buy Right, Rockwell, etc. High quality Mitre 10 VS Bunnings Consumers can be divided into age groups: people aged 35 to 54, people aged 55 and over, and people aged 15 to 34. Products and services can be divided into seven parts: tools and equipment, Timber, buildings supplies, gardening tools, paint and paint supplies plumbing supplies and others. Marketing Mix Increasing profits through TV shopping Increasing the number of sales by providing some special products to construction company and decoration company increasing profits through providing more decorating products to customer Introduction Mitre 10 Less varieties Year Sales Growth 2002-03 12,909.3 0.0 2003-04 14,005.1 8.5 2004-05 13,889.1 -0.8 2005-06 13,402.8 -3.5 2006-07 12,936.1 -3.5 2007-08 12,966.0 0.2 2008-09 12,391.9 -4.4 2009-10 12,348.2 -0.4 2010-11 12,332.4 -0.1 2011-12 12,649.4 2.6 2012-13 13,378.0 5.8 2013-14 14,278.9 6.7 2014-15 14,849.0 4.0 Growth of sales in the whole hardware market Good geographic position without drastic competition Great marketing capabilities Perfected online shopping system Reasonable price Numerous stores and product category Good member system Mitre 10 is growing faster, acquisition with other company. However, need to promote their consumers. The growth–share matrix RESOURCES AND CAPABILITIES OF ADVANTAGE Established for over 50 years over 400 Mitre 10 stores => the second largest player in the Australian home improvement and hardware industry In 2011, Mitre 10’s sales are $800 million, profit of about $12 million In 2013, $950 million sales and $36 million profits Miter has grown significantly the most appropriate growth type for Miter 10 is Stars develops significantly in Australia $13 billion in annual revenue 1.3% annual growth from 2009–2014 Expect to grow 23% over the next five years to reach $14.2 billion 2016-17. Opportunity Identified Mitre 10 Good culture of employees Advanced information management technology named by partner Bunnings Warehouse is Australia's largest household hardware chain with 289 stores in Australia Home Timber and Hardware is Australia's third largest retail hardware chain owed by Woolworths Limited and Lew’s. Masters Home Improvement is an Australian Home Improvement chain operated by Woolworth and Lew’s. Porter's Forces Customer-Based Resources and Capabilities Low quality ABIS (2013). Mitre 10 Up, Masters Down, Burnings Strong. Retrieved from: http://aubis.com.au/.../mitre-10-up-masters-down.../# Charbonneau, S., Chitty, H. & Stuart, M. (2009). Marketing: real people, real choices (1st ed.) Prentice Hall New Zealand. Kotler & Amstrong, 2013 Principles of marketing (15th ed.). Englewood Cliffs, N.J.: Prentice Hall Mitre 10 (n.d). About us. Retrieved from: http://www.mitre10.com.au/About-Us/ http://nespresso-malongo-strategycomparison.blogspot.com.au/2013/12/nespressos-five-forces-analysis.html http://www.smartdraw.com/examples/view/7ps+marketing+mix/ Position of Advantage Thanks for listening Contents Internal Support Resources & Capabilities Market Situation Low quality Mitre 10 was born in June 1959 Mitre 10 is the trading name of an Australian retail and trade hardware store chain There are over 400 "Mitre 10" and its associated "True Value Hardware" franchises throughout Australia. Quality&Quantity Competitive Environment More varieties
Transcript: Red Rocks our Quinceanera. Had a chance to meet them Jesus Lucero's Summer Share Juanito Values.. Long Term Goals.. This summer.. Dad, Gramma, & Mom Brazil To play COD Assurance, Honesty,Knowledge, Family, Respect & Love. Barcelona :D Soccer Quotes Its during our failures... that we discover our true desire for success. Kevin Ngo & the idea of traveling. Elephants Skydiving I Like.. Graduate, get a job, go to college to study Psychology. Photography I love..
Transcript: 43% 80% Number Seating 80% 80% Quoting 43% Turnover Profit 150M 10% Quoting 80% Hit Rate Share Technology Next Year Planned Growth 80% Share Hit Rate Quoting 80% Hit Rate 100 Other Share 100 Quota 80% 80% Share 100 1677 43% Top 3 Customers 80% Top 3 Customers Automotive Machinery and Equipment Electronic Components 1236 80% Interior 43% Plants Potential Turnover 80% Quoting 80% 43% Profit Number 100 Electronic Components 80% 86% Reason 80% 43% Quoting Seat System Plants Other Transport Interior Interior 43% Hit Rate 1236 Building and Housing Actual 80% 1236 80% 80% Reason 43% Planned Growth 1236 Forecast Turnover Exterior Turnover Planned Growth 43% 75% Forecast 150M 66% Profit Stampings 80% Number 1236 75% 43% Actual Interior Safety Systems 1236 Technology # Quoting 80% Share Potential 80% Number Actual $ 43% 100 Springs 2M 80% Quoting 100 Profit 80% Seat System 43% Quoting Forecast Special Product Electrical Equipment Market Sectors 80% Powertrain Planned Growth 46% Planned Growth Interior Safety 80% 2% Number Number 10M Turnover 74% 5 Years 184
Transcript: Bruce Henderson (BCG in 1970’s) Global management consulting firm 87 offices in 45 countries One of the Big Three management firms Conclusion BCG Matrix, this decision making tool will be helpful in deciding the position of the product takes all factors that a business ultimately must face into consideration. Cash Cows Dogs Definition BCG Growth Share Matrix Examples Boston Consulting Group BCG Matrix Chart Developed By Well established Great opportunities Star Question Mark iPhone and iPad Apple TV Macbook iPod Sources: - Investopedia http://www.investopedia.com/terms/b/bcg.asp http://www.investopedia.com/terms/m/marketshare.asp - Henderson, Bruce D. "The Product Portfolio" - About BCG -Strategic Management Insight Kob Dej-Udom Definition Good opportunities But low market shares Milk money out Matured Low potential growth Not well established
Transcript: Likes Fam[ily) Spain My Brothers and Sisters Hawaii M o d e l l i n g My Friends Shoes Singing Listening to music Barbizon Winter Share Things Activites Little Trips or Big Trips My Parents House Party Seven Falls Philippines Loves Playing Basketball Places Long Term Goals Important People Tennessee Values Going to the movies Crime Scene Investigator Florida Flat Irons Mall Travel Arizona Teas Christmas Eve at Jacobs Activites that define me
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