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    Assignment 2 Business Analysis

    Uploaded by

    Fierce Alpha
    This document provides strategies for two products based on their classification in the BCG matrix: 1) Product A has a 59% market share in a declining market. It is classified as a cash cow and the strategies suggested are to maximize profits from the product, invest those profits in question marks or stars, and pursue related diversification through product innovation. 2) Product B has a 14% current market share but the market is growing and it is projected to become the market leader with 16% share. It is classified as a star and the strategies are to provide sustaining investment, pursue cost leadership to gain market share, increase advertising budget, maintain product quality, and conduct external analysis of competitors.

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    Assignment 2 Business Analysis

    Uploaded by

    Fierce Alpha
    85 views2 pages
    This document provides strategies for two products based on their classification in the BCG matrix: 1) Product A has a 59% market share in a declining market. It is classified as a cash cow and the strategies suggested are to maximize profits from the product, invest those profits in question marks or stars, and pursue related diversification through product innovation. 2) Product B has a 14% current market share but the market is growing and it is projected to become the market leader with 16% share. It is classified as a star and the strategies are to provide sustaining investment, pursue cost leadership to gain market share, increase advertising budget, maintain product quality, and conduct external analysis of competitors.

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    BCG matrix

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    This document provides strategies for two products based on their classification in the BCG matrix: 1) Product A has a 59% market share in a declining market. It is classified as a cash cow and the strategies suggested are to maximize profits from the product, invest those profits in question marks or stars, and pursue related diversification through product innovation. 2) Product B has a 14% current market share but the market is growing and it is projected to become the market leader with 16% share. It is classified as a star and the strategies are to provide sustaining investment, pursue cost leadership to gain market share, increase advertising budget, maintain product quality, and conduct external analysis of competitors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    85 views2 pages

    Assignment 2 Business Analysis

    Uploaded by

    Fierce Alpha
    This document provides strategies for two products based on their classification in the BCG matrix: 1) Product A has a 59% market share in a declining market. It is classified as a cash cow and the strategies suggested are to maximize profits from the product, invest those profits in question marks or stars, and pursue related diversification through product innovation. 2) Product B has a 14% current market share but the market is growing and it is projected to become the market leader with 16% share. It is classified as a star and the strategies are to provide sustaining investment, pursue cost leadership to gain market share, increase advertising budget, maintain product quality, and conduct external analysis of competitors.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Assignment Topic & Details:

    BCG matrix
    How would you categorize the following product or SBU? Also formulate strategies
    accordingly.
    a) In the current year the product’s market share was over 59%, and it is the market leader.
    The market itself is declining slowly in size
    b) A product is in a market which is expected to double in size over the next 2 years. The
    expected market share of the product in two years’ time is 16%, compared with 14%,
    which makes it the current market leader.

    Solution
    a) Given the market share of the product is more than 50% in comparison and is considered
    a market leader whereas market is declining. So, the product is certainly a cash cow.

    Since, there is no anticipation of further market growth, because the product has achieved
    its top most position in the market or, the industry in which the product lies is obsolete now,
    there is not much a strategist can do. A cash cow is a pioneer product and is gaining the
    maximum profit it can. So, the best option would be to avoid investing in the further growth of
    the product by trying to gain market share by advertising. This will not do much as the market
    growth is near to the end or is static.

    However there are few strategies a strategist might consider;

    1) Cash out as much as they possible can from the product. Because a cash cow is
    creating substantial profits for the company.
    2) Invest the profits obtained from the cash cows into the Question marks or Stars.
    3) Try innovation considering the product as the inspiration and use a related
    diversification corporate strategy.

    b) If the current market share of the product is low and the market growth is expected to be
    high and considering that a 2% (14% - 16%) increase in the share can make the product a
    market leader clearly indicates that the product has many competitors in the market.
    Having too many competitors holding approximately 86% of the shares in the market the
    product is currently doing quite well. Abiding to all these facts the product is definitely a
    Star.

    1) A star is a profit making product and a future leader. The best strategy is to provide it
    with sustaining investment.
    2) Since there is room for growth and the product is not going to be obsolete anytime
    Page 1 of 2 Assignment
    soon, the strategist may consider cost leadership to gain market share much
    efficiently.
    3) More budget relaxation on advertisement will also be beneficial for the product reach.
    4) The target is to keep the product as authentic as possible along with its overall
    marketing strategies. Losing product quality trying to focus on cost effectiveness may
    result in an opposite effect.
    5) As the product is capturing the market share and along with it is also gaining the
    attention of its competitors. The strategist should consider doing an external analysis
    on periodic bases.
    **End**

    Zulqurnain Saeed

    L1S14BSAA0027

    Page 2 of 2 Assignment

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