Lecture 4 Business Portfolio Analysis. Business portfolio consulting firms: BCG, McKinsey etc. Business selection for multi-business and cross-industry.

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Presentation transcript:

lecture 4 Business Portfolio Analysis

Business portfolio consulting firms: BCG, McKinsey etc. Business selection for multi-business and cross-industry companies

BCG Matrix Question mark DogCash Cow Star Relative market share 1 0 average rate low high

Basic principles for BCG analysis Reasonable businesses distribution Reasonable cash flow among different businesses The importance of STAR Avoid the lack of certain business Proper moving speed among boxes

Critiques to BCG Matrix The difficulty of defining market, market share and growth rate –Scope of industry –Focusing on past not future Too simple to label the status high or low Focusing on phenomenon not potential

Case Question mark DogCash Cow Star Relative market share 1 0 average rate low 阿胶复方阿胶浆瓶装阿胶 high 补血颗粒补血膏复方阿胶颗粒

size ROR scalecompeting specialization scattered The market share and the rate of return

Business status-industry attractiveness matrix Factors reflecting industry attractiveness –Market growth rate, industry size and profitability. Such as market growth rate, industry size and profit, competition, technology, social environment and etc. Factors reflecting business competitive advantage –Market share, profit rate, competitiveness, technology, management

leaderstrugglequestion leaderdecline hopeless custody Cash supplier Industrial attractiveness Business status Weak (-100%) Strong (100%) Unattractive (-100%) Attractive (100%)

Product-lifecycle analysis Competitive status Product-market phases mature developing excluding entering decline strongnormalweak