They neither generate cash nor require huge amount of cash. Due to low market share, these business units face cost disadvantages. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/rival firms. These business firms have weak market share because of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other strategic aim, it should be liquidated if there is fewer prospects for it to gain market share. Number of dogs should be avoided and minimized in an organization.
Limitations of BCG Matrix
The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance.
…show more content…
The SPACE matrix evaluates different variables and assigns them a score considering how important they are for the situation of the company. It analyzes four different areas (two internal to the company and two external) that will represent four quadrants in a graphic. The purpose of this matrix is to situate the company in one of these four quadrants and give a suggestion –according to which quadrant results- about what type of strategies a company should follow: conservative, aggressive, defensive or competitive. But, how do we come up with the quadrant where our company is located? The first step is to address each of the four areas of question: the internal strategic dimensions represented by the financial strength (FS) and the competitive advantage (CA); and the external strategic dimensions represented by the environmental stability (ES) and the industry strength …show more content…
3.17 GE-McKinsey Matrix
1. “GE-McKinsey nine-box matrix is a strategy tool that offers a systematic approach for the multi business corporation to prioritize its investments among its business units.
2. It is a framework that evaluates business portfolio, provides further strategic implications and helps to prioritize the investment needed for each business unit
Understanding the tool
In the business world, much like anywhere else, the problem of resource scarcity is affecting the decisions the companies make. With limited resources, but many opportunities of using them, the businesses need to choose how to use their cash best. The fight for investments takes place in every level of the company: between teams, functional departments, divisions or business units. The question of where and how much to invest is an ever going headache for those who allocate the