Strategic management. Business Strategy. Disney is capitalizing on the Toy Story franchise by opening Toy Story attractions as its theme parks. Gas price are forcing Toyota to cut back on SUV and truck production.
Identify the organization’s current mission, goals, and strategies
*Managers need to point out opportunities (positive trends) that organization can exploit and threats (negative trends) it must counteract or buffer against
Managers identify organizational strengths (positive factors) and weaknesses (negative factors)
A strength could be:
A weakness could be:
An opportunity could be:
A threat could be:
Anne Mulcahy, Xerox’s CEO, made strategic adjustments to regain market share and improve her company bottom line by cutting jobs, sold assets, and reorganized management
Search Engine Market Share By U.S. Monthly Visitors and Search Queries in April 2008
The four major search engines stack up as follows:
Yahoo: 20.3% (unrounded, 20.28%)
Microsoft: 6.3% (unrounded, 6.26%)
Ask: 4.2% (unrounded, 4.17%)
1) Growth Strategy
2) Stability Strategy
3) Renewal Strategy
How intense ?
The hope is that stars become the next cash cows.
Sustaining the business unit's market leadership may require extra cash, but this is worthwhile if that's what it takes for the unit to remain a leader.
When growth slows, stars become cash cows if they have been able to maintain their category leadership, or they move from brief stardom to dogdom
Question marks(also known as problem child) are growing rapidly and thus consume large amounts of cash, but because they have low market shares they do not generate much cash. The result is a large net cash consumption.
A question mark has the potential to gain market share and become a star, and eventually a cash cow when the market growth slows.
If the question mark does not succeed in becoming the market leader, then after perhaps years of cash consumption it will degenerate into a dog when the market growth declines.
Question marks must be analyzed carefully in order to determine whether they are worth the investment required to grow market share.Stars & Question Marks
These units typically generate cash in excess of the amount of cash needed to maintain the business.
They are regarded as staid and boring, in a "mature" market, and every corporation would be thrilled to own as many as possible.
They are to be "milked" continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.
Dogs, also can called as pets, are units with low market share in a mature, slow-growing industry.
These units typically "break even", generating barely enough cash to maintain the business's market share.
Though owning a break-even unit provides the social benefit of providing jobs and possible synergies that assist other business units, from an accounting point of view such a unit is worthless, not generating cash for the company.
They depress a profitable company's return on assets ratio, used by many investors to judge how well a company is being managed. Dogs, it is thought, should be sold off.Cash Cows & Dogs
When the organization has a lot business units fall in “question marks” and “stars”, that organization tends to apply growth strategy as a corporate strategy.
For the organization that has most of its business units fall in “cash cows”, organization tends to apply stability strategy to remain its profit status as long as it can.
For the organization that has a lot of “dog”, may need to use renewal strategy to find any solutions for the particular bad-performance product.How to use it?
Introduction-- A product is developed and comes to market.
Growth-- Consumers learn about it and more people buy it. It becomes more competitive through modification, price adjustments, wider distribution and other initiatives.
Maturity-- The product generates profits with more professional productivity learning from experience. But problems can arise, such as the arrival of competing products in the marketplace. The product maybe modified or marketed in a new way to keep profits strong.
Decline-- Sales decrease because of market saturation, obsolescence or other factors.Placing a product on this timeline suggests strategies for keeping its profitability high.
Example: If profits sag (decrease) during the Maturity stage, the manufacturer might offer discounted pricing or wider distribution.Product Life Cycle