Porter’s Generic Model - Jiwaji
Boston Consulting Group (BCG) Matrix andPorter’s Generic ModelbyDr. Sandeepa MalhotraFor MBA(BE) IV SemStrategic Market Management
BCG Matrix Boston Consulting Group (BCG) Matrix is the most renowned four celled matrix ( 2 * 2 matrix) toexamine different businesses in its portfolio, developed by BCG, USA. It is also known as Growth-Share Matrix and Corporate Portfolio Analysis ToolThe matrix assess SBU and a portfolio of products on the basis of two dimensions. Relative Market share – measures the product‟s market share relative to the largest competitor inthe industry Market/Industry growth – looks at the products general level of growth within its market.Accordingly, businesses are classified into four distinctive groups: Stars (upper left quadrant).Cash Cows (lower left quadrant).Question Marks or Problem Child (upper right quadrant).Dog(lowerrightquadrant).Type to enter a caption.Horizontal X Axis represents Relative Market Share running from low on the left to high on the right)Vertical axis Y Axis represents Market/Industry Growth Rate running from low at the bottom to highat the top
STAR(high growth and market share) Stars are business units operating in high growth rate with a highmarket share (potentially market leaders) in a fast-growingindustry. Stars generate large amounts of cash due to their high relativemarket share but also require large investments to fight competitorsand maintain their growth rate. Diet Coke, Reliance Petrol PumpNet cash flow is usually modest. If successful, a star will become acash cow when the industry mature.Cash Cows(low growth and high market share) Cash Cows represents business units having a large marketshare in a mature, slow growth industry. Cash cows require little investment and generate cash that can beutilised for investment in other business units. Cash cows therefore typically generate cash in excess of theamount of cash needed to maintain the business. This „excesscash‟ is supposed to be „milked‟ from the Cash Cow forinvestments in other business units (Stars and Question Marks). Cash Cows ultimately bring balance and follow stability strategies.Ex. Amul Milk, Lifebuoy, Lux
Question MarksHigh Growth, Low Market Share Question marks are also called as Problem Child They represents business operating in low relative market share and located in a high growthindustry. Like the name suggests, the future potential of these products is doubtful.They require attention todetermine if the venture can be viable. They have the potential to gain market share and becomeStars (market leaders) eventually. Question marks are generally new goods and services which have a good commercialprospective. If given attention and investment they can become stars otherwise if ignored, then question marksmay become dogs.DogsLow Growth, Low Market Dogs" refers to products that have a low market share in unattractive, low-growthmarkets. Dogs hold low market share compared to competitors. Neither do they generate cash nor do they require huge cash. In general, they are notworth investing in because they generate low or negative cash returns and may requirelarge sums of money. Dogs are likely to be divested or liquidated.Ventures or start-ups usually startas Question Mark
BCG Matrix Marketing Strategies Stars : should “Invest” to prevent market shareloss at all costs, and if possible grow sharewhile the market is still expanding. Cash cows : generate the funds require toinvest in another business so cash cows shouldbe “Hold, Milk/Harvest and Defend” Question Marks : Either Discard or Invest moremoney in question marks to convert into thestar quadrant Dogs: Liquidate or Divest the business of failingproducts (dogs) and release the money that'stied up in them
Limitations of BCG Matrix BCG matrix categorises businesses as low and high, but generallybusinesses can be medium also. Thus, the true nature of business may notbe reflected. High market share does not always leads to high profits. There are highcosts also involved with high market share. Growth rate and relative market share are not the only indicators ofprofitability. This model ignores and overlooks other indicators of profitability. BCG MATRIX uses only two dimensions, Relative market share and marketgrowth rate. Problems of getting data on market share and market growth.
Porter's Generic Strategies ModelThe Generic Strategies can be used to determine the direction (strategy) of your organisation.Michael Porter in his book ‘Competitive Advantage: Creating and Sustaining Superior Performance’describes three basic strategies, namely Cost Leadership, Differentiation and Focus. He believesthat a company must choose a clear course in order to be able to beat the competitionHe divided the later Focus into Cost Focus and Differentiation Focus.The four strategies to choose from are:1.Cost Leadership (no frills)2.Differentiation (creating uniquely desirable products and services)3. Focus Differentiation Focus Cost Focus
Cost LeadershipThe objective of Cost Leadership is to minimise the cost to the organisation of delivering products and services. TheCost Leadership strategy is exactly being the leader in terms of cost in respective industry or market. In costleadership, a firm focus is to become the low cost producer in its industry. There are two main ways of achievingthis within a Cost Leadership strategy: Increasing profits by reducing costs, while charging industry-average prices. Increasing market share by charging lower prices, while still making a reasonable profit on each sale becauseyou've reduced costs.Wal-Mart's and Maruti are the examples of Cost Leadership StrategyDifferentiationDifferentiation involves making your products or services different and more attractive than those of yourcompetitors. Differentiating the product offering of a firm means creating something that is perceived industry wideas being unique in terms of features, functionality, durability, support, brand image etc. The objective is to achievecompetitive advantage through differentiation and then positioning the business uniquely to meet those criteria. Thisstrategy is usually associated with charging a premium price for the product uniqueness and to covers the additionalproduction costs, giving customers clear reasons to prefer the product over other, less differentiated products.Examples of a differentiation leadership include global brands like Nike and Mercedes.
Focus StrategyThe focus strategy concentrates on a narrow segment and within that segmentattempts to achieve either a cost advantage or differentiation. The main premise isthat the needs of the group can be better serviced by focusing entirely on it. Thefirm using focus strategy often enjoys a high degree of customer loyalty andchooses a specific segment or group of segments in the industry on the basis ofeither cost advantage or differentiation. Cost Focus in which a firm seeks a cost advantage in its target segment, while in Differentiation Focus in which a firm seeks differentiation in its target segmentin terms unique products to meet the special needs of buyers in certain segments.
Porter's Generic Strategies Model The Generic Strategies can be used to determine the direction (strategy) of your organisation. Michael Porter in his book ‘CompetitiveAdvantage: Creating and Sustaining Superior Performance’ describes three basic strategies, namel
application of Porter's Generic Model, and especially which component of this model is applied where and to what extent. 1.3 OBJECTIVES OF THE STUDY The objectives of this study are to: 1. Determine the use of Porter's generic strategies in the hospitality industry. 2. Identify factors influencing the use of Porter's generic strategies. 3.
strategies according to Porter, Porter's Five Generic Strategies (Gorondutse and Gawuna 2017). Cost leadership and . In the first part of this paper, Porter's generic competitive strategies are described, focusing on the most important aspects of each type of strategy. The second part of the study is a literature review of Porter's Strategy.
2. Gary Porter Construction d/b/a Porter & Sons ("Porter") was at all times relevant a sole proprietorship, owned by Gary A. Porter ("Mr. G.A. Porter"), with its principal place of business located in Magna, Salt Lake County, Utah, and was a licensed subcontractor. 3. National Surety Corporation ("National") was at all times relevant an
Porter's generic strategies namely cost leadership, differentiation and focus have become increasingly important for companies to gain valuable insights from customer needs and ultimately competitive advantage. This study aims at establishing the relationship between Porter's generic strategies used by bus companies plying the Kisumu .
The role of government in Porter's Diamond model 77 The model focuses upon the conditions that drive national innovative capacity (Porter, 1985, 1990, 1998, 2001). Figure 2 Diamond model - the model of cluster determinants Source: Porter (1990, 2001) Saxenian (1990, 1994, 2007) coined a similar concept of regional advantage to promote
Fanning more than Porter) in Daniel B. Wallace, Greek Grammar Beyond the Basics (Grand Rapids: Zondervan, 1996). 14 Porter, Verbal Aspect 88. 15 Buis t M. Fanning, "Approache s to Verbal Aspec in New Testamen Greek: Issue Defini-tion and Method," in Porter and Carson, Biblical Greek 48. 16 Porter, Verbal Aspect 88-90; Idioms 21-22. 17 Porter .
— Fairfield Porter [FP] was a painter. — Eliot Porter [EP], his brother, became a preëminent nature photographer. — Aline Porter, née Kilham [AP], Eliot’s wife, was also a painter, but in addition, made boxes containing art objects made or assembled by her. — Stephen Porter was the son
ACCOUNTING 0452/12 Paper 1 October/November 2019 1 hour 45 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your centre number, candidate number and name on all the work you hand in. Write in dark blue or black pen. You may use an HB pencil for any diagrams or graphs. Do not use staples, paper clips, glue or correction .
