Boston matrix
2.1 BCG Matrix Analysis
The Boston Consulting Group’s growth-share matrix is the model of analysing the company’s portfolio of SBUs. The following figure plots the position of Virgin’s SBUs.
2.2 Implications of BCG Matrix Analysis on strategy development
Portfolio analysis has three uses.
First, a business can assess the balance of its portfolio…
Second, the portfolio provides a framework for strategic market planning…
Third, each SBU should have a clear objective appropriate to its portfolio position…
2.3 Limitations of BCG Matrix Analysis
The major weaknesses are as follows:
Market growth is an inadequate description of overall industry attractiveness.
Market share is an inadequate proxy for relative competitive strength.
The analysis is highly sensitive to how the market is defined. Definitions of the market can be fairly arbitrary and different definitions will radically change an SBU’s matrix position.
The model assumes that business units are independent.
2.4 The parenting matrix-the Ashridge portfolio display
In deciding on the appropriateness of the role of the parent and the mix of SBUs best suited to the parent, the parenting matrix can be useful. The Ashridge Portfolio Display is a way of displaying this degree of “fit” of a portfolio of business. Two dimensions of fits are assessed:
Fit between the critical success factors of the SBUs and the skills, resources and characteristics of the parenting organization.
FIT between the parenting opportunities of SBUs and the skills, resources and characteristics of the parenting organization.
Heartland businesses are ones that the parent can add value to without danger of doing harm.
Since Virgin Atlantic founding, the airline has relied on service, value-for-money, and innovation, dished up with panache and flair, to differentiate itself in the market. Virgin Atlantic announced further expansion plans on the back of continuing growth and increased profitability. It is now the company
The Boston Consulting Group’s growth-share matrix is the model of analysing the company’s portfolio of SBUs. The following figure plots the position of Virgin’s SBUs.
2.2 Implications of BCG Matrix Analysis on strategy development
Portfolio analysis has three uses.
First, a business can assess the balance of its portfolio…
Second, the portfolio provides a framework for strategic market planning…
Third, each SBU should have a clear objective appropriate to its portfolio position…
2.3 Limitations of BCG Matrix Analysis
The major weaknesses are as follows:
Market growth is an inadequate description of overall industry attractiveness.
Market share is an inadequate proxy for relative competitive strength.
The analysis is highly sensitive to how the market is defined. Definitions of the market can be fairly arbitrary and different definitions will radically change an SBU’s matrix position.
The model assumes that business units are independent.
2.4 The parenting matrix-the Ashridge portfolio display
In deciding on the appropriateness of the role of the parent and the mix of SBUs best suited to the parent, the parenting matrix can be useful. The Ashridge Portfolio Display is a way of displaying this degree of “fit” of a portfolio of business. Two dimensions of fits are assessed:
Fit between the critical success factors of the SBUs and the skills, resources and characteristics of the parenting organization.
FIT between the parenting opportunities of SBUs and the skills, resources and characteristics of the parenting organization.
Heartland businesses are ones that the parent can add value to without danger of doing harm.
Since Virgin Atlantic founding, the airline has relied on service, value-for-money, and innovation, dished up with panache and flair, to differentiate itself in the market. Virgin Atlantic announced further expansion plans on the back of continuing growth and increased profitability. It is now the company