Marketing Critique: BCG Matrix
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Table of Contents Introduction 3 Concept Overview 3 Functional Critique 5 Intellectual Critique 6 Ethical Critique 7 Political Critique 8 Conclusion 8 Bibliography 9
Introduction This paper will attempt to provide a broad critique of the Boston Consulting Group Matrix in light of the ideas of Hackley (2009). 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
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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, 1998). The critical view of the BCG Growth-Share Matrix was also shared by Morrison and Wensley (1991), who claimed that the model was “myopic” as it prescribed a set of strategic solutions, rather than encourage marketing executives to think creatively with respect to their product lines. On the contrary, Cooper, Edgett and Kleinschmidt (1999) 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 (1991) 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, 1983). However, this is where the intellectual contribution of the BCG Matrix ends, they argue. They claim that the Matrix
Course Description This course involves an integrated analysis of the role of marketing within the total organization. Specific attention is given to the analysis of factors affecting consumer behavior, the identification of marketing variables, the development and use of marketing strategies, and the discussion of international marketing issues. Policies Faculty and students/learners will be held responsible for understanding and adhering to all policies contained within the following two documents: University policies: You must be
Due to the growing competition and diminishing market share, companies are opting for different strategies to achieve their survival objectives as well as growth. Companies are thus executing grand strategies to provide their businesses with a clear direction for its strategic actions. These strategies, therefore, aim at both short term and long term sustainability and growth, and they include innovation, market development, product development, and concentration.
The business portfolio analysis uses quantified performance measures and market growth to analyze a firm’s strategic business units as though they were a collection of separate investments. The BCG advises clients to locate the position of each of its SBUs on a growth share matrix. The vertical axis is the market growth rate, which is the annual rate of growth of the specific market or industry in which a given SBU is competing. The horizontal axis is the relative market share, defined as the sales of the SBU divided by the sales of the largest firm in the industry. Each of the quadrants are given a specific name and description based on the amount of cash they generate. Cash cows; are SBUs that typically generate large amounts of cash, far more than they can invest profitability in their own product line. They have a dominant share of slow-growth market and provide cash to pay large amounts of company overhead and to invest in other SBUs. Stars; are SBUs with a high share of high-growth markets that mat need extra cash to finance their own rapid future growth. When their growth slows, they are likely to become cash cows. Question marks or problem children; are SBUs with a low share of high growth markets. They require large injections of cash just to maintain their
How is marketing defined? What is its importance in a company’s success? This paper will discuss and explain different definitions of marketing along with a definition of author himself. In addition, this paper will elucidate the importance of marketing by giving three examples where marketing was adapted with few mistakes resulting in disaster.
The BCG matrix portrays the perspective of the product portfolio, which is the growth-share matrix. This framework of tool categorizes products within a company's portfolio or within the business units as stars, cash cows, dogs, or question marks according to growth rate, market share, and positively or negative cash flow. By using positive cash flows a company can capitalize on growth opportunities. From this analysis, it can be seen that the products that is growing
During the next stage, maturity, there is intense rivalry for a mature market. Efforts may be limited to attracting a new population, leading to a proliferation of sizes, colors, attachments, and other product variants. Battling to retain the company’s share, each marketer steps up persuasive advertising, opens new channels of distribution, and grants price concessions. Unless new competitors are obstructed by patents or other barriers, entry is easy. Thus, maturity is a period when sales growth slows down and profits peak and then start to decline. Strategy in the maturity stage comprises the following steps: (a) search for new markets and new and varied uses for the product, (b) improvement of product quality through changes in features and style, and (c) new marketing mix perspectives. For the leader firm, Step c may mean introducing an innovative product, fortifying the market through multibrand strategy, or engaging in a price-promotion war against the weaker members of the industry; the nonleader may seek a differential advantage, finding a niche in the market through either product or promotional variables.
Therefore, the firm takes the position of a star in the BCG Matrix. High returns and that attract high costs. The challenges facing the organization rotate within the brackets of consumer bargaining power, competition threats and threat of substitutes for products and services within the healthcare industry (Jeffs,
The BCG Matrix composes organizations along two measurements—business development rate and market share. Business development rate relates to how quickly the whole business is expanding. Market share characterizes whether a specialty unit has a bigger or littler share than competitors.The question mark exists in another, quickly developing industry, however has just a little market share. The question mark status in the BCG matrix is dangerous: It could turn into a star, or it could come up short. ConocoPhillips has needed to carve its capital venture through the downturn, going from $17 billion in 2014, to $10 billion in 2015, at last arriving at $5 billion this year. “That’s the amount of transformation you had to make in this
According to, the Ansoff Product-Market Growth Matrix is an instrument in marketing that was developed by Igor Ansoff. In the Ansoff matrix, it allows the marketers to look at different ways to grow the business through existing products and markets and new products and markets. Moreover, the matrix is composed of four various strategies:
Armstrong, G & Kotler, P. Marketing: An Introduction, Seventh Edition. (2005). New York: Prentice Hall.
Marketing is a lot like religion and most people have a strong belief that this belief is typically predicted on how they were raised rather than a formal study of religion belief. Marketing also has its share of agnostics as well as atheists – “I don’t believe Marketing exists”. Regardless of how marketing is viewed today, few questions are come up: Which can survive without the other? This is a litmus test in many situations and all believe it is fair to say that any business cannot survive without a proper marketing strategy. (Wardlaw, 2007)
Donnelly, J. & Peter, J. (2014). A Preface to marketing management (14.th ed.). New York, New York.
Marketing is a venerable practice in spite of being critical within or critical of it. Those intimately allied to marketing within the school of business have made available critical, sustained cross-examination of marketing activities; many a time scholars outside the marketing discipline have scrutinized the theoretical and conceptual squabbles presented sustaining marketing and pinpointed where practice digresses strikingly from the idiom used by scholarly and business spheres alike.
For an organization to beat the competition, they need to understand what the consumer wants. Marketing concepts are based upon consideration on what the organization’s customers need and nourishing these needs better than the
The Matrix essentially shows the risks that will be exposed as a particular strategy will be used. The idea