Читать книгу STRICTLY GROWTH BUSINESS - Mike Illsley - Страница 11

There are many ways of building the product portfolio over time The chart above shows how this might be accomplished. The four quadrants of the Boston Matrix are expanded to provide space for the possible activities and the way in which products can be moved through, and between the different stages.

Rising Stars should be fed to fuel their growth. The finest possible result for a product is for an in-house invention to move immediately into rising star status.These require strong investment in capacity, marketing and product development. Unit costs need to be steadily reduced and as much added value built in as possible. The relationship with the customer base has to be developed and secured.

Rising stars that stall in their growth can be returned to problem child status for further consideration.

Another means of initiating a rising star is through acquisition.

Steady growth as a rising star will inevitably result in the product moving into the cash cow category.

The Problem child needs to be nursed along.This implies a limited amount of attention and cost. When it is deemed that the chance of life is minimal the product should simply be ditched. Products with potential have to be further developed to initiate growth and movement into the rising star category.

Cash cows are milked to generate cash for development of products in the other categories. The product life has to be extended as long as possible and the competitive position continually secured through steady investment. Selective reductions in some resources might be made to increase the margin. Cash cows can be converted back into rising stars through development of added value.

Acquisition to improve market share is also a viable approach for cash cows.

Aging cash cows will move towards dog status as the market declines.

Dogs have to be starved.There are a variety of ways dogs can be removed from the business. As a last resort they are simply closed down, but this often has heavy closure costs. Acquisition is a viable approach to increase the overall market share and thereby convert the dog into a cash cow. Divestment is the reverse of acquisition as another business improves market share of their product range.

Finally a dog can sometimes be re-invented and moved into rising star status by using the existing resources for an entirely new product venture.