BOSTON COSULTING

GROUP
CONCEPT OF COMPETITIVE ANALYSIS AND
CORPORATE STRATEGY
TEAM MEMBERS

 Samreen Tariq  Shehzina Nafees

 Abdul Wasae  Rubab Naqvi
Shaikh  Marium Arif Jafri
 Ahmed Waqar  Ali Bilawal Khan
 Hina Mustafa  Faizan Shehzad
 Nazish Siddiqui  Tariq Bin Aijaz
 Hardesh Kumar
Hira
 Zeeshan Channa

INTRODUCTION

 BCG Idea
 Firms with diversified portfolio can
channelize their resources to most
efficient and productive units.
 Each product and division can be
assigned a role.
 Individual roles can be integrated into
portfolio strategy.
 MARKETS
 STRATEGIES


 High growth market  Increase market

 share
 
 Low growth Market  Focus on cash flows
at the cost of
losing market
share
CRITERIA FOR CHOOSING
DOMINANCE STRATEGY

 Assessment of competitive strength

 Cost of gaining market leadership
 Mission of cash generation rather than
sales growth

 PORTFOLIO STRATEGY
 Market growth (External; Non controllable)
 Market share (Controllable)
ASSUMPTIONS OF PORTFOLIO
STRATEGY
 Margins and cash generation depends
on the market share
 Growing market requires cash inputs to
maintain market share
 Increasing market share requires
budgets for advertising expense, plant
and equipment etc.
 Growth declines as product reaches
maturity
PRODUCT LIFE CYCLE AND BCG

 In BCG growth dies as product reaches

maturity


 Star products Cash cows Falling



 Question marks Dog

vertically
PRODUCT DYNAMICS

PROD
UCT ?
MARK
ET ?
GROW SUCCESS
TH SEQUENCE
RATE

$ DISASTER X
SEQUENCE

$ X
RELATIVE MARKET SHARE
COMPETITIVE ANALYSIS

1.Internal balance
 Check whether products are appropriately
distributed among four quadrants
2.Trend
 Develop an early period portfolio (3-6 years),
compare it with the current portfolio and
analyze general directions and movements
of products (trends)
3.Competitive evaluation
 Portfolio of major competitors must be
developed and compared with internal
portfolio for competitive advantage

Cont’d COMPETITIVE ANALYSIS

4.Industry position
 Appropriate strategy should be obtained
by plotting market growth against the
company’s own product’s growth
6.Financial balance
 Quantitative strategy decisions are revised
and formed up on the basis of detailed
cash flow calculations
TAKEAWAYS

1.Market leader may be inefficient cash

producer
2.Cash generation and market share are
directly related
3.Market share and profitability
relationship may also be obscure if
improper analysis and segmentation
is done
4.The long range horizon is quite evident,
it is not just the technique for making
short term adjustments