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BCG’s Advantage Matrix (BCGII) - Strategic Business Evaluation Tool

Understand BCG’s Advantage Matrix (BCGII) and how it helps companies assess the suitability of their Strategic Business Units strategies in different competitive environments. Learn about the different types of SBUs - Fragmented, Specialized, Stalemate, and Volume - and their strategic implications.

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BCG’s Advantage Matrix (BCGII) - Strategic Business Evaluation Tool

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  2. BCG’sAdvantage Matrix (BCGII) What it is: A matrix that enables companies to assess whether their strategic business units’* (SBU) strategies are appropriate to their competitive environments. Your Business Unit • FRAGMENTED • Companiessuccessfully use differentiation but are unable to gain fromeconomies of scale. FRAGMENTED SPECIALIZED Strong • SPECIALIZED • There are manyways to differentiate and the effects of differentiation are substantial. Companies focus on segment leadership. Scope for differentiation • STALEMATE • Weakpotential for differentiation and smalleconomies of scale- companiescompete on costreductionthrough factor reduction (outsourcing for example). VOLUME STALEMATE Weak • VOLUME • Verylittle scope for differentiation, companiesrely on volume and economies of scale to gain market leadership. Small Large Size of potentialcompetitiveadvantage *A Strategic Business Unit is an autonomous division within a companyresponsible for itsown management, market segmentation and productoffering.

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