Be honest with yourself about you, Summaries of Mathematics

Download Be honest with yourself about you and more Summaries Mathematics in PDF only on Docsity! [ Five C’s ] » Company: What do you know about the company? How big is it? Is it a public or private company? What kinds of products or services does it offer to its clients? » Costs: What are the major costs? Haw have its casts changed in the past year? Haw do its costs compare to those of athers in the industry? How can we reduce costs? » Competition: Who are the biggest competitors? What market share does each player hold? Has market share changed in the last year? How do our services or products differ from the competition? Do we hold any strategic advantage over our competitors? > Consumersiclients: Who are they? What do they want? Are we fulfilling their needs? How can we get more? Are we keeping the ones we have? >» Channels: Distribution channels. How do we get our product into the hands of the end users? How can we increase our distribution channels? Are there areas af aur market that we are nat reaching? How da we reach them? [Four P’s] » Product: What are our products and services? What is the company's niche? > Price: How does our price compare to the competition's? How was our price determined? Are we priced right? if we change our price, what will that do to our sales volume? > Place: How do we get our products to the end user? How can we increase our distribution channels? Do our competitors have products in Places that we don't? Do they serve markets that we can't reach? If so, why? And how can we reach them? » Promotions: How can we best market our products? Are we reaching the right market? What kind of marketing campaigns has the company conducted in the past? Were they effective? Can we afford to increase our marketing campaign? +BCG Matrix In 1998, Wiley Press published Perspectives on Strategy. The book is a collection of articles and essays written by senior members of The Boston Consulting Group. One popular and useful framework is the BCG “Product Portfolio Matrix.” This matrix is designed to place a product or group of products into one of four categories while taking into account a company’s relative market share. BCG has been kind enough to let us reprint Chapter Three. The Product Portfolio (Bruce D. Henderson, 1970)" To be successful, a company should have a portfolio of products with different growth rates and different market shares. The portfolio composition is a function of the balance among cash flows. High-growth products require cash inputs to grow. Low-growth products should generale excess cash. Both kinds are needed simultaneously.  The Matrix MARKET SHARE = * ? 5 STAR QUESTION MARK 2 e x CASH FLOW Four rules determine the cash flow of a product. + Margins and cash generated are a function of market share. High margins and high market share go together. This is a matter of common observation, explained by the experience curve effect. + Growth requires cash input to finance added assets. The added cash required to hold market share is a function of growth rates. + High market share must be earned or bought. Buying market share requires an additional increment of investment. + No product market can grow indefinitely. The payoff from growth must come when the growth slows, or it never will. The payoff is cash that cannot be reinvested in that product. Products with high market share and slow growth are cash cows. Characteristically, they generate large amounts of cash, in excess of the reinvestment required to maintain share. This excess need not, and should not, be reinvested in those products. In fact, if the rate of retum exceeds the growth rate, the cash cannot be reinvested indefinitely, except by depressing returns. Optimum Cash Flow Manet SHant HGH Low ke son. [2 Necative mr (5) Growrn IS poste / |X + on- ("aioe (redest Products with low market share and low growth are pets. They may show an accounting profit, but the profit must be reinvested to maintain share, leaving no cash throw-off. The productis essentially worthless, except in liquidation All products eventually become either cash cows or pets. The value of a product is completely dependent upon obtaining a leading share of its market before the growth slows.