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Strategic Management: Using the BCG Matrix

You have been given the BCG matrix on two divisions of your company - the appliance and electronics divisions. It appears that the electronics division can be located in the upper right quadrant of the matrix and the appliance division appears in the lower left quadrant of the matrix. You need to offer a strategic recommendation which includes these four findings:

1. Include an opinion on how much reliance the company should have on BCG findings
2. What do these findings suggest?
3. What recommendations would you make?
4. What other measurements should be used to help reinforce or negate these findings? Support your answer.( GE/McKinsey Matrix (2010).)

After you give your views on the 'reliability' of BCG, answer the following:
1. What is the matrix saying to Tolapp about the Appliances?
2. What is the matrix saying to Tolapp about the electronics?

Based on these 2 answers, please state:
1. What recommendation to the company, would you personally make regarding future action pertaining to:
a. Appliances
b. Electronics

Last but not least; what other measurement tools would you recommend Tolapp use to either support or negate (prove otherwise) BCG's findings.

Solution Preview

A company should use the BCG matrix as one of the numerous tools used for formulating and evaluating a strategic plan of an organization. BCG is a useful tool for evaluating a company with a portfolio of product or service offerings. It helps in setting priorities, allocation of resources and efforts for different products or service offerings of an organization.

The findings from the BCG matrix suggest the relative attractiveness, growth prospect of various product groups of an organization. Based on the positioning of different products on the BCG matrix, recommendations will be made to exploit the growth opportunities available ...

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