Please read the following short essay and respond with short analysis and atleast one question or concern.
Describe limitations and advantages of either the Boston Consulting Matrix or Quantitative Strategic Planning Matrix!
Advantages of the Boston Consulting Matrix are:
Easy to perform
Helps to understand the strategic positions of business portfolio
It’s a good starting point for further more thorough analysis
Limitations of the Boston Consulting Matrix are:
Business can only be classified to four quadrants (Dogs, Cash Cows, Stars, and Question Marks). It can be confusing to classify a firm’s brand portfolio (SBU) that falls right in the middle.
It does not define what ‘market is’. Businesses can be classified as cash cows, while they are actually dogs, or vice versa.
Does not include other external factors that may change the situation completely
Market share and industry growth are not the only factors of profitability. Besides, high market share does not necessarily mean high profits.
It denies that synergies between different units exist. Dogs can be as important as cash cows to business if it helps to achieve competitive advantage for the rest of the company.