Discussion Essay
The Boston Consulting Group Model
A planning tool developed by the Boston Consulting Group (BCG) uses graphical
representations of a company's goods and services to assist it in deciding what to keep, sell, or
spend more in. The matrix displays a company's products as a four-square matrix, with the market
share axis on the x-axis and the rate of market growth on the y-axis. A company with a wide
portfolio ought to constantly assess its product lines to determine which ones are profitable, which
ones are incurring losses, and which ones require improvement. Through this procedure, the
business is able to deploy its resources more effectively. It is based on the combination of market
growth and market share relative to the next best competitor. Market share is the proportion of a
company's sales that are proportionate to all sales of the market considered. This measure value
provides an overview of the company's position in relation to the marketplace and its rivals. As a
result, a certain company might have a low market share (5%) or a big market share (80%) in
relation to its competitors. On the other hand, market expansion describes a gradual rise in demand.
It might be high or low. In terms of market share (low, high) and market growth (low, high), the
BCG Model depicts four major groups. The concept is based on the finding that business units
inside an organization can be divided into four groups which are the stable revenue sources, stars,
question marks, and dogs.
Products that are in low-growth markets but for which the business has a significant share
of the market are referred to as "cash cows," and the business should milk the stable revenue source
for as long as it can. Leading products in established marketplaces tend to be stable revenue
sources. Typically, these goods produce returns that exceed the market's growth rate and are selfsufficient in terms of cash flow. The benefits of these items should be utilized as long as possible.
Stable revenue sources’ worth may be easily determined because of how predictable their cash
flow patterns are. The idea is to effectively milk low-growth, high-share sources of stable revenue
for money to reinvest in high-growth, high-share "stars" with significant future potential. Products
that have significant market share in high-growth markets are referred to as "stars" and should
receive additional investment. Stars make excellent earnings but also spend a lot of money from
the business. When the market's overall growth rate slows down, a star that can maintain its
position as the market leader eventually turns into a stable revenue source. Although question
marks have a low market share and a high growth potential, their future potential is uncertain.
Because of the rapid growth rate in this area, they have the potential to become stars and stable
revenue sources with the correct strategies and investments. However, due to their small market
position, bad investments could still degrade them to Dogs even after significant investment. Dogs
have a small market share and a slow rate of market expansion. They neither produce money nor
demand a lot of it. They are typically not worth investing in because they have little or negative
cash returns and could be expensive to maintain. These items have cost disadvantages as a result
of their small market share.
The General Electric Model
The General Electric Matrix is a 3x3 matrix created to assist you in choosing where to
invest resources within a company. You can compare it to the BCG Matrix, which is more wellknown, in that you assign SBU (Strategic Business Unit) goods or activities to each box to decide
what to do next. The GE Matrix is a three-by-three tool that enables you to map various goods,
services, or activities in accordance with how appealing the area is to investors and how strong the
business unit is. The try harder, growth, and leader cells are favored places with significantly
attractive potential for growth. You should invest in these activities because you have a high
strength in a highly attractive industry. On the other hand, it is wise to exercise caution while
making additional investments in the improve or quit, proceed with care, and cash generation cells
due to their moderate attraction. Although not always at the point of exit, activities that fall under
this group are less appealing for investment than the first three activities. The final three cells—
the phase withdrawal and withdrawal—are not appealing, and the corporation has to consider
leaving. If business is weak and the market is unattractive, you should think about shutting
company or leaving. It is crucial to remember that these are just guidelines and not rules, so bear
in mind that you also need to consider the bigger picture and the potential of your business unit,
market, and industry structure.
Global Strategies
The phrase "global strategy" refers to three distinct categories: global, multinational, and
international strategies. All three of these strategies help an organization accomplish its goal of
global expansion. It is helpful to distinguish between three types of worldwide expansion that
result from a company's resources, capabilities, and current international position while
formulating "global strategy." The company's strategies outside of its home markets can be viewed
as international if it is still primarily focused on those markets. For an instance, A dairy business
might sell part of its extra milk and cheese supplies outside of its home country. But the domestic
market continues to be its primary strategic focus. The other one is when a corporation may have
entered a variety of areas as its international activities have grown, and each market requires a
unique strategy. These plans come together to make a multinational strategy. Importantly, each
country's competitive advantage is assessed independently. Moreover, some businesses' worldwide
operations have advanced to the point where they treat the entire world as one market with just
slight modifications for each country or global area. We refer to this as a global strategy. It is
important to note that competitive advantage is mostly created on a global basis. Following global
strategies may be beneficial for firms due to the larger market for its products. Businesses may see
an increase in sales and earnings. They can profit from the wide availability of their goods and
services in addition to the economies of scale. The twenty-first century is a time of limitless reality.
The ability to communicate, use technology, move throughout the world, and, in particular, do
business or provide services, are all global phenomena. Global strategies are now considered as a
result. Global markets, international expansion, and global products present a needed alternative
for some organizations.