Disadvantages Of The Bcg Matrix

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To survive in the increasingly competitive business and corporate environment, firms must identify the right direction and long-term objectives then strategize with the most effective strategies, resources, and competencies to achieve the required market advantages. A firm's corporate and competitive strategies must therefore include its long-term direction, scope of activities, competitive advantages, competencies, values, aspirations, and resources. There are several types of analyses and business techniques that organizations carry out to identify all or some of the above mentioned aspects and elements of competition. These analyses include SWOT, Pestle, and Ansoff matrix among others. This paper explores and explains the meanings of some…show more content…
BCG assists businesses to organize and prioritize products regarding the funding and attention that products should target. According to the BCG model, products are classified into categories depending on factors such as market growth and market share in comparison to the largest competitor in the industry . Unfortunately, most businesses may not know when to use the BCG matrix model. However, experts recommend it BCG for both high-growth products and low-growth products. While a high-growth product could refer to a new one, which is expected to get to some market, a low-growth product refers to an established and known product. The BCG matrix thus helps firms to know the status of their products so that they know which of the products to promote more than the…show more content…
That is, an industry analysis should equally be a central part to a business' marketing strategy. Michael Porter's five forces analysis is an industry analysis framework, which deals with the five forces that affect a firm's competitive intensity (Porter, 1998). In other terms, a firm must consider the attractiveness of the industry it intends to join. One of the forces is the threat rival competition, which is quite intense in markets that have high returns and attract new businesses. The presence of many players in a given market further results in decreased profitability, a situation that makes it necessary that the existing players strategize to block new entrants into the market. The other force is the economies of product differences such as customer loyalty, brand equity, capital requirements, and access to distribution. Third is the threat of substitute products or services outside the dominion of the common product boundaries, which increases the predilection of clients to switch to other choices. Customers' bargaining power is the other market force that businesses should strategize for since changes in customers' purchasing power could place extra pressure on firms (Porter, 1998). Similarly, suppliers of labor, raw materials, components, and expertise services also have a bargaining power, which has a lot of competitive

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