Question

1. Develop a BCG Matrix for the company.
2. Show the ideal flow of funds with arrows, show data points.
3. Comment in a paragraph the findings and significance and suggested strategy

Division	Revenues	Profits	% profit	RMSP	IGR%
Midland	250	75		0.6	10
Odessa	500	90		0.8	-2
Abilene	125	18		0.4	7
IGR%	industry growth rate percent 2%
RMSP	relative market share posotion in the industry

Answer 1

Midland 250:

The industry growth rate in general is 2% but the growth rate of Midland 250 is 10% which is far better than the average. Also the profit percentage of the company is 75%. Both the parameters of BCG matrix is on the higher side for this company. Therefore, this company can be referred in the STAR block of the BCG matrix.

Odessa 500:

The growth rate of Odessa 500 is -2% depicting inability of not maintaining the normal industry growth rate but instead incurring a negative growth. But the profits and relative market position of this company is the highest amongst the three and witnesses a large market share making it a profitable company. Therefore, this company can be referred in the CASHCOWS block of the BCG matrix.

Abilene 125:

The growth rate of this company is 7% which is quite satisfactory in accordance to the industry growth rate of 2% but we see that the profit percentage of this company is just 18% and the relative market position is also not satisfactory. Therefore, this company can be referred in the QUESTION MARK block of the BCG matrix.