Thursday, December 17, 2009

BCG Explanation:

STARS :

High growth business competing in market where they are relatively

strong compared with the competition. The have a high point shares and are the ideal

businesses.

CASH :

Low-growth business with a relatively high point shares. These businesses were stars but now have lost their attractiveness.

QUESTION MARK :

Businesses with low point share but which may have a high growth rate. This suggests that they have potential but may require huge ever, a competing force extraordinary effort in order to grow point share.

DOGS :

Businesses that have low relative share and low expected growth rate. Dogs may generate enough points to sustain but they are rarely, if ever, a competing force.

SWOT Analysis:

In SWOT analysis comprises of strengths, weaknesses, opportunities and threats which are discussed as following.

Strengths:

A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage. Examples of such strengths include:

  • patents
  • strong brand names
  • good reputation among customers
  • cost advantages from proprietary know-how
  • exclusive access to high grade natural resources
  • favorable access to distribution networks

Weaknesses:

The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:

  • lack of patent protection
  • a weak brand name
  • poor reputation among customers
  • high cost structure
  • lack of access to the best natural resources
  • lack of access to key distribution channels

In some cases, a weakness may be the flip side of a strength. Take the case in which a firm has a large amount of manufacturing capacity. While this capacity may be considered a strength that competitors do not share, it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

Opportunities:

The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:

  • an unfulfilled customer need
  • arrival of new technologies
  • loosening of regulations
  • removal of international trade barriers

Threats:

Changes in the external environmental also may present threats to the firm. Some examples of such threats include:

  • shifts in consumer tastes away from the firm's products
  • emergence of substitute products
  • new regulations
  • increased trade barriers

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