Question

Describe the BCG Growth Matrix.

How is it used in a Portfolio Analysis? Using the example of Verizon Inc., analyze and explain where its various major lines of business/divisions would fall in the BCG matrix.

[Consider: landline phone service, wireless services, fiber optic services, media, internet if things] What strategies might you recommend to improve its BCG positioning?

Answer 1

BCG THE GROWTH MATRIX

1) Business models are based on providing products or services that are profitable now, but they also attempt to identify changes in offerings that will keep the company profitable in the future.The Boston Consulting group's product portfolio matrix (BCG matrix) is meant to assist with long-term strategic planning,is to assist a business consider growth opportunities by reviewing its portfolio of products to make a decision where to take a position , to discontinue or develop products. The growth-share matrix helps the company in deciding which products or units to either keep, sell, or invest more in.The growth share matrix was built on the logic that market leadership results in sustainable superior returns .the market leader obtains a self-reinforcing cost advantage that competitors find difficult to replicate. These high growth rates then signal which markets have the foremost growth potential.

BCG can be used for portfolio analysis. ex: VERIZON

Landline Phones: Dog - it's going to be a moneymaker in certain markets but there are many other landline providers, and customers are definitely moving faraway from even having a landline


Wireless Service: moneymaker - Verizon features a large share of the market, but it's growing slowly or not in the least now that cell/smart phones are so ubiquitous.


FIber Optics: interrogation point or a star counting on geography - fiber optics may be a newer technology and is growing pretty fast, but Verizon doesn't have the most important market share in every area


Internet: Cash Cow
Internet of things: a star depending on Verizon's relative market share, the internet of things industry is growing rather quickly

Recommended Strategy: We've gathered that the majority of the offerings offered by Verizon are within the moneymaker phase. Which is similar to what we call the maturity phase in the product life cycle. In order to avoid becoming a dog Verizon can specialise in extending product life cycle like adding new features, updating product quality, and packaging. here divesting from "dog" business areas like landlines and putting those resources into "stars" like the Internet of Things would help them stay on top of shifting industry trends.

STATERGIES TO IMPROVE BCG POSITIONING

1)We can increase investment in a product its market share.

2)relase the amount of money already stuck in the business.

3) invest more in a product , hold it in the samequadrent and leave it be.

4) reduce investment and tryto take maximum cash flow from th prouct.

The most effective strategy for your company's moneymaker depends on the character of the merchandise or service, also as your overall goals. Invest enough to stay your income division functioning smoothly, and make decisions about the way to spend the added income supported your overall priorities and goals.Having a successful cash cow will allow your business to finance experimentation and innovation, and to maintain healthy margins.One strategy, social media marketing, is a great option for your business. This digital marketing method is free and is used by various businesses from many industries. Using this low-budget marketing method helps to expose your brand online and earn additional leads for your business.using SEO to find star product will help you boost ranking of the company website in the search results. And also will find your Star products and help to know more about the prodict by knowing about the star products clearly. . Using strategies we ensures that your Star products continue to attract new leads and earn conversions for your business.

Asian telecommunications company use natural-language processing software to gain insights into customer behavior through the usage of BCG and also , including the calling pattern and reason for calls , and general customer sentiment about the company .thus the the company was able to determine that 45% of customer contacts could be automated through digital channels . And also by reducing the failure points can be analysed through the study of digital and human contacts.