GDB 2 Solution The BCG matrix is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. To ensure long term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash input and low-growth products that generate a lot of cash. It has two dimensions: Market share and Market growth
Placing products in the BCG Matrix results in 4 categories in a portfolio of a company
- Stars: High growth, high market share
- Cash Cows: Low growth, high market share
- Dog: Low growth, low market share
- Question marks: High growth, low market share
The Case: Changhong Ruba was established in 1971, Ruba Group, an electronics conglomerate in Pakistan, has collaborated with Changhong group to establish new innovative brand “Changhong Ruba” for Pakistan market. They have diversified businesses such as Textiles and Trading companies based in Dubai and Singapore. The group is committed to provide excellent and innovative goods in Pakistan market and become well known in electronics industry in all over the Pakistan.
Changhong Ruba offering following products in Pakistan:
TV, AC, Refrigerator, Freezer, Water Dispenser, Power Bank
GDB 2 Solution and Discussion Question:
By keeping in view above 4 categories of BCG Matrix, you are required to discuss which product (s) of Changhong Ruba falls in which quadrant (stars, cash cows, question marks and dogs) along with the appropriate strategies in each quadrant for each product (s). Provide reasons to justify your answer.
GDB 2 Learning Objectives
- Understand the concept and sources of BCG Matrix
- Importance of BCG Matrix in competitive survival
- Relationship of growth with BCG Matrix
GDB 2 Solution MGT603
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