A)

Boston Consulting Group Matrix

Relative Market Share

High

Low

High

Strategy: Build

Strategy: Build or

Harvest/Divest

Growth Rate

STAR

QUESTION MARK

Engineered Wood

Products

Stones & Quartz

Appliances

Strategy: Hold

Strategy: Divest

CASH COW

DOG

Accessories & Fittings Services

Low

Classification and explanation of SLC Products are as follows:

 Stones and Quartz (SQ) and Appliances (AP) o These products are question mark or problem child based on BCG matrix

classification. o A question mark according to BCG matrix refers to a product that has low

relative market share and high growth rate. o Question marks are products which are not market leaders in a high growing

market and are net users of cash. o Stones and Quartz calculated RMS is 0.10 which is low and growth rate is

12.07%, which is high, hence it is classified as question mark. o Appliances calculated RMS and growth rate are 0.22 and 11.61%, which are

low and high respectively, hence the product is also a question mark. Strategy Recommendation o SLC’s management may either build/invest heavily to grow the market share

of stones and quartz and appliances if there are promising potential to grow their market share or harvest or divest these products if the prospects are bleak.

 Accessories and Fittings o This product is a cash cow based on BCG matrix classification. o A cash cow according refers to a product that has high relative market share

and low growth rate. o Cash cows are products which are market leaders in a low-growing market

and earn substantial net cash inflows. o Accessories and fittings calculated RMS is 2.07 which is high and growth rate

is -1.97%, which is low, hence it is classified as a cash cow. Strategy Recommendation of the recommended strategy to be followed by SLC’s management is to hold

or consolidate or maintain the product’s current market leadership.

 Engineered Wood Products o This product is a star based on BCG matrix classification. o A star according refers to a product that has high relative market share and

high growth rate. o Stars are products which are market leaders in a high-growing market and

earn neutral or zero net cash flows. o Star’s calculated RMS is 1.11 which is high and growth rate is 20.00%, which is

high, hence it is classified as a star. Strategy Recommendation of the recommended strategy to be followed by SLC’s management is to build

or invest to grow the market share of this product.

 Services o This product is a dog based on BCG matrix classification. o A dog according refers to a product that has low relative market share and

low growth rate. o Dogs are products which either failed at inception or are products nearing the

end of their lifecycle in a declining market and earn zero net cash flows or generate marginal net positive cash inflows. o Services’ calculated RMS is 0.11 which is low, and growth rate is 00.00%, which

is low, hence it is classified as a star. Strategy Recommendation to the recommended strategy to be followed by SLC’s management is to divest

or liquidate or withdraw this product from the market.

B)

Michael Porter’s six principles of strategic positioning in the context of SLC are discussed below:                                                           Principle 1. The strategic goal for a company should be to achieve a superior long-term return on investment. A company should not select as its strategic goal any other objective, such as maximizing sales volume or maximizing market share, on the assumption that high profits will result from this. Maximizing sales or market share does not necessarily provide a superior return on investment. SLC’s business strategy at inception was differentiation which is said to have proven highly effective with customers who dealt directly with the company and these customers paid premium price, hence superior returns. However, due to subsequent sales decline the company decided to adjust its business strategy by adding cost leadership due to decline in sales. Adoption of cost leadership by SLC may reverse declining sales trend but may not necessarily achieve a superior long- term return on the company’s investment in the affordable products offered to artisanal customers and commercial developers.

 Principle 2. The strategy must offer a unique value proposition for the customer. This is a combination of price and benefits that competitors do not (and cannot) offer. The value proposition might be for customers in the entire market, or for customers in a segment or niche of the market. Under a low-cost leadership strategy, the key value proposition is low price, while a differentiation strategy focuses on delivering unique value to customers. In the case of SLC, the company offers premium, differentiated products to customers who value higher quality and prefer to deal directly with the company. At the same time, SLC supplies more affordable products to artisans and commercial developers whose primary objective is to purchase at low prices, value proposition in cost leadership strategy.

 Principle 3. There should also be a distinctive value chain. A company should perform similar activities to competitors, but in a different way that offers customers more value. SLC’s value chain must be structured to support its chosen competitive strategy, whether low-cost leadership or differentiation. In SLC’s case, the company is attempting to pursue both strategies concurrently: offering high-value, differentiated products to premium customers while also providing lower-cost alternatives to price-sensitive segments. Managing these dual objectives poses operational and strategic challenges, as the value chain must be configured to deliver efficiency and affordability without compromising quality. This approach requires organizational ambidexterity by balancing superior customer service and premium product offerings with cost control and streamlined operations to deliver cost leadership.

 Principle 4. The selected strategy will involve some trade-offs. This means that by selecting one set of strategic options, a company inevitably chooses not to select alternative options. For example, there has to be a trade-off between the selling price of the product and the benefits that it offers. By offering one set of benefits, the firm is choosing not to offer others. There is a trade-off between low-cost strategy and differentiation, if SLC follows low cost, it cannot offer differentiated products and services and on the other hand if it decides to follow differentiation it cannot achieve low cost. This explains the reason SLC segment its customers and offered each segment either differentiation or low cost but not both strategy to the same customer segment.

 Principle 5. All the different elements in the strategy and in the value, chain should link together and reinforce each other. The adoption of differentiation strategy at inception by SLC dictated the importation high-quality products, delivering flawless finishing through precision cutting and edge banding, and providing speed and reliability in installation services. These value chain activities reinforce the differentiation strategy by the company. Similarly, with the company introducing cost leadership, it must ensure that cost efficiency is achieved throughout its value chain to reinforce cost leadership strategy.

 Principle 6. There should be continuity of strategic direction. Having chosen its strategies and the direction it wants to take its businesses; a company should apply the strategy consistently. It should avoid the temptation of changing strategy every time a new threat emerges. SLC must consistently follow its chosen strategy in the long run. It should not be alternating between low cost and differentiation in the short term as that has the potential risk of creating confusion in the minds of customers. Following this principle, SLC should have continued to pursue differentiation strategy which it sets for itself right from the inception of the company.