(a) Describe the Boston Consulting Group (BCG) matrix.
(b) Explain the product-market strategy that might be chosen for products in each quadrant of the matrix.
(c) Identify two weaknesses of the BCG matrix as a model for strategic analysis.
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The TopTen Supermarkets Group is the largest supermarket group in the country. In spite of a decline in total consumer spending in the national economy last year, spending in the supermarket sector as a whole increased, and TopTen also increased its market share. It now has over 20% of the market for food-and-drink shopping in the country. It is also enjoying strong growth in the sale of non-food products such as clothing (it has its own brand of fashion clothes) and domestic electrical goods.
The group has just announced record annual profits, and investors expect the growth in profitability to continue, in spite of signs of weakness in the national economy.
Rival supermarket groups have been attempting to regain lost market share. Two rival groups merged a year ago. Another competitor was acquired a few years ago by a major US supermarket group and is pursuing an aggressive competitive strategy.
TopTen’s success is due partly to its reputation for low prices and reasonable-quality products, and its efficient in-store service.
The group continues to acquire land and to purchase retail property with the intention of building more out-of-town stores and smaller in-town convenience stores. It does not have any business operations outside the country. There is some concern about the possibility of government action to prevent the group from exploiting its ‘near-monopoly’ position in the market.
Required
(a) What is the purpose of SWOT analysis?
(b) Using the information provided, carry out a SWOT analysis for the TopTen Supermarket Group.
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The purpose of market segmentation is to divide a market into different sections, each with a distinctive group of potential customers. A segmentation strategy is then developed, and a different marketing mix is used to market a product to each segment.
Typically a different price is charged for the product in each segment, but it may be necessary to vary the product offered to each segment of the market, in order to meet the needs of customers in that segment.
Required
Suggest ways in which a railway company might segment its market for rail travel.
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A marketing mix consists of four elements: product, price, place and promotion.
Required
Which of these four elements is each of the following?
| Company | Action |
|---|---|
| (a) Manufacturer and supplier of PCs | Providing free Nexus software with every PC supplied |
| (b) Car manufacturer | Displaying a new model of sports car at a motor show/exhibition |
| (c) A company that installs domestic gas boilers | Offering to take the customer’s old boiler in part-exchange for a new boiler |
| (d) Television company | Offering downloads of TV programmes to customers’ home computer via the internet |
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Many countries currently have an ageing population. At some time in the fairly near future, there will be about twice as many individuals who are past the normal age for retirement as there are individuals between 18 and 65 years of age.
Describe the possible consequences of an ageing population for a company that currently employs about 4,000 people.
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(a). Identify a model that can be used to carry out a strategic position analysis of the industry in which an entity operates.
(b). PESTEL is a model for carrying out a position analysis of the environment within which an entity operates. What does ‘PESTEL’ stand for?
(c). There are several global oil companies, such as PetroGlobal and EnergyCorp. Use the PESTEL model to identify environmental factors that will affect the strategic planning of such companies.
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The president of a Japanese car manufacturing company, TCM, recently stated that his suit would not expand its production capacity any further at its factory in Nigeria. This factory produces TCM cars for the African market with sales agreed in the local currency of the target market.
The president explained that the reason for this decision was the currency risk. The company was concerned about its competitiveness in the African market. It had a 5% share of the Nigeria cars market, but only a 1% share of the market in the rest of Africa.
Required
Explain what the company president meant by the term ‘currency risk’
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(a) Your organisation has outsourced most of its functions to adjust to modern trends in organisational management. Identify FIVE benefits that may accrue to your organisation from this arrangement.
(b) Greenfield Enterprises is operating as a medium-sized company in Lagos but has now decided to expand to all the regional capitals, and has therefore decided to decentralise its operations. State FIVE reasons for the decision to decentralise its operations.
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