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How to Write a Summary of an Article? Bcg Matrix Critique Marketing Critique: In his book Marketing: A Critical Introduction, Hackley presents a framework for analysing marketing models.
He suggests that well established marketing concepts should be re-evaluated from time to time, to determine if the marketing studies for that area are applicable to current practice, and revisit the functional, intellectual, ethical, and political relevance of the said concept.
Where alternative versions of the matrix have come up in recent studies, the traditional BCG Matrix continues to be popular and this paper intends to evaluate whether the support for the model is justified or needs to be rectified.
Also called the Growth-Share Matrix, the model presented by Hendersonorganized the products as per their respective growth rate, market share, and positive or negative cash flow. The Matrix was said to create further growth opportunities for the firm if more resources were invested in those products which generated positive cash flows.
Cash cows are therefore well established, and do not require much investment marketing expenditures to continue to generate cash flow.
As these products generate cash flow, they are highly guarded. Over time, however, these cows may lose appeal in the market and may have to be retrenched.
These products require significant cash investments to generate any kind of boost in sales. Strategies in the case of question marks may either lean towards expansion or retrenchment, depending on the market share growth enjoyed by the product. The nature of the market usually results in these products being produced at a cost disadvantage, and as a result, the cash flow generated from these products is negligible.
Businesses usually seek to divest these products, unless they serve an alternate strategic aim. Functional Critique The BCG Matrix presents a strong framework as to how products can be managed from a strategic marketing perspective. At the core of it, the functionality of the BCG Matrix is focused around maximizing returns on investment and how best to deploy organizational resources Cooper, Edgett, Kleinschmidt, However, there have been several critiques of its applicability Stalk and Stern, In particular, the model has been criticized for its polarities with respect to how the market growth and market shares have been presented.
In the real world, products do not have a high or low share, and are often stuck somewhere in the middle Hambrick, MacMillan, and Day, The matrix presents no ideas as to what kind of strategies are to be implemented for the product in this case.
Further, market growth rate has been cited as an important driver of product development. Contrary to the advice of the BCG Matrix, market growth rate is viable only till the point of saturation, after which point it would be counterintuitive for the firm to be investing in a product that does not enjoy majority stake Stalk and Stern, On the contrary, Cooper, Edgett and Kleinschmidt found in their study that firms which centered strategy on the product portfolio model were not only more financially viable, but marginally outperformed other firms.
Therefore, it is safe to conclude that where the applicability of the BCG model may be challenging, the results it produces are enough for strategists to continue using the model. Intellectual Critique Morrison and Wensley found that the BCG Matrix set a standard for strategic models, and that a plethora of similar matrix style models came about in the years after the BCG Matrix was introduced Wind, Mahajan, and Swire, However, this is where the intellectual contribution of the BCG Matrix ends, they argue.
They claim that the Matrix oversimplified the nature of marketing strategies, and streamlined product arrangements in a way that was confirmatory rather than innovative, a view shared by Marren Other researchers tend to believe that the introduction of the BCG matrix brought forth the importance of financial management in marketing.
In particular Schoeffler, Buzzell, ; HeanyWind, Mahajan ; Swireand Dirkinderen ; Crum found that the model recalibrated organizations to focus their strategies more around portfolio management and enhancement. The simplicity of the matrix meant that it could be applied to other areas of marketing management, such as product life cycle model Barksdale ; Harris,sales force management Strahle ; Spiro, Despite the fact that the model faced significant critique from the academia when it was first launched, it is ironic that the BCG Matrix continues to be an inevitable curriculum component in almost every Marketing and Business Management program around the world.
In their study, Morrison and Wensley found that a majority of instructors continued to espouse the benefits of the matrix to their students, despite having some reservations about its applicability. Perhaps the best appraisal of the intellectual value of the BCG Matrix was provided by Henderson, the creator of the model: Ethical Critique As per Hackleymarketing studies need to examine the ethical and social values which surround marketing practice and theory.
In the case of the Boston Consulting Group Matrix, the model is an internal strategic tool which shapes product assortment which is to be deployed to the market.The BCG matrix has further identified those business units that have become a source of continuous loss for the organization.
Moreover, these business units or products are not likely to offer any significant growth to the organization in terms of sales or market share. BCG MATRIX The BCG Matrix was applied in order to explore the growth potential of Starbucks’ four major product categories.
The matrix divides product categories into four segments based on their market share (x-axis) and market growth (y-axis). for Strategic Management) BCG Growth Share Matrix Research Assignment No. 2 The BCG Growth-Share Matrix The BCG Growth-Share Matrix is a portfolio planning model that was developed by Bruce Henderson of the Boston Consulting Group in the early 's.
Oct 02, · SUMMARY The Boston Consulting Group (BCG) matrix is enhancing a multidivisional firm’s efforts to formulate strategies. This matrix allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate each division relative to all other divisions in the 5/5(23).
Diagram of the BCG Growth-Share Matrix with a discussion of the four categories of Dogs, Question Marks, Stars, and Cash Cows, and some of the framework's limitations. Scenario Planning An introduction to scenario planning, including its benefits and an overview of the scenario planning process.
The BCG allows a multi-focused firm to manage its portfolio by examining relative market share position and the industry growth rate each division relative to all other divisions in the organization.
The Starbucks BCG matrix below shows four (4) divisions which include Question Marks, Stars, Cash Cows, and Dogs.