1. Boston consulting group model.
Boston Consulting Group is a first-class management consulting company in the United States. In the early 1960s, the analysis method of "market growth rate-relative market share matrix" was initiated and popularized, and its existing strategic business units were classified and evaluated, and strategic investment was allocated. Because this method constructs a four-quadrant analysis matrix, it is also called Boston matrix method, or BCG method for short.
The ordinate in the matrix diagram represents the sales growth rate and the annual sales growth rate of each strategic business unit of the enterprise. Assume that 10% is the dividing line, and above 10% is the high growth rate; Below 10% is a low growth rate.
In the matrix diagram, the abscissa represents the relative market share, indicating the ratio of the market share of each strategic business unit of the enterprise to the market share of the biggest competitor in the same industry.
If the relative market share of strategic business units is 0.4, that is, its market share is 40% of that of market leaders; If the relative market share of enterprise strategic business unit is 2.0, that is to say, the market share of enterprise strategic business unit is twice that of the biggest competitor in the same industry. Assume that 1 is the dividing line, and above 1 is a high relative market share; 1 the following is a low relative market share.
The circle in the matrix represents the strategic business unit, whose position is determined by the market growth rate and relative market share of the strategic business unit; Each circle in the figure represents a strategic business unit, and the size of the circle represents the sales volume of each business unit. Boston matrix diagram divides the strategic business units of enterprises into four different business types:
(1) question mark. This kind of business is characterized by high market growth rate and low relative market share. Most of the business of an enterprise starts from the problem class. This kind of business exists for two reasons: first, the market demand of this kind of business is developing rapidly, and enterprises have invested less in these businesses in the past, so their market share is small; Second, it is possible that this kind of business operated by enterprises lacks competitive advantage compared with similar businesses operated by competitors. Therefore, if the problem business wants to develop further, it needs to invest a lot of money to buy factories, equipment and personnel to keep up with the rapidly growing market demand and catch up with market leaders. The problem is that if enterprises continue to increase their investment in these businesses, they will not be able to gain a favorable competitive position in the market, and they will not be able to recover the invested funds or realize the expected return on investment. Therefore, enterprises must seriously consider whether to invest heavily or get rid of the "problem" in time and give up this kind of business. As can be seen from (Figure 2-2), the enterprise has three problem businesses, which may be too many. It is better for an enterprise to concentrate its limited funds on one or two of the three problem businesses, so that its operating efficiency may be higher.
(2) stars. If an enterprise manages the problem business successfully, it will become a star business. Star business is a successful business in the market at present. The market demand for this kind of business is large, so the market growth rate is high. But this kind of business requires enterprises to invest a lot of cash to maintain the market growth rate and repel various attacks from competitors. So star merchants are often cash consumers rather than cash producers; With the slowdown of market growth, this kind of business may become a golden bull in the future and a high-profit business project for enterprises. If an enterprise does not have a proper amount of star business, it will lack stamina for development and must be highly valued.
(3) cash cow. When the annual market growth rate of a certain business drops below 10%, but it continues to maintain a large market share, the star business becomes Taurus. This kind of business can bring a lot of cash to enterprises. Because of the low market growth rate, enterprises do not need a lot of investment, and because this business is a market leader, it also enjoys the advantages of economies of scale and high profit margin, and gets a lot of cash from this kind of business. The income from Taurus business can be used to pay for various expenses of current marketing management activities, support the development of star business and problem business, or maintain dog business. If there is too little Taurus business, it means that the business combination of the enterprise is unhealthy, because the survival and development of the enterprise can only rely on a small amount of Taurus income. From (Figure 2-2), the enterprise has only one big Taurus, and this financial situation is very fragile. Because if the market share of this Taurus suddenly drops, enterprises will have to withdraw cash from other units to strengthen this Taurus in order to maintain its market leading position; If the enterprise uses all the cash recovered by this Taurus to support other units, this strong Taurus will become a weak ox.
(4) dogs. This kind of business refers to the business with low market growth rate and low relative market share. Generally speaking. Their profits are very low or even losses, and their development prospects are dim. The dog business may be a business that has entered the market recession, or it may be an unsuccessful business, or such business does not have the strength to compete with competitors. The existence of the dog business must have sufficient reasons, such as the possibility of a rebound in market growth and the possibility of becoming a leader again. If it is only because of some emotional reasons, we must make up our minds to give up this business, especially the dog business is too much, and we must resolutely clean it up. From Figure 2-2, the enterprise has two dog businesses, which is obviously not good.
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