Finally the company can divest the SBU by selling it or phasing it out and

Finally the company can divest the sbu by selling it

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Finally, the company can divest the SBU by selling it or phasing it out and using the resources elsewhere SBUs change their positions in the growth-share matrixoMany SBUs start out as questions marks and move into the star category if they succeedoThey later become cash cows as market growth fallsoThen they finally die off or turn into dogs toward the end of their life cycles The company needs to continually add new products and units so that some of them will become stars, and eventually, cash cows that will help finance other SBUs Problems with Matrix Approaches However, such centralized approaches listed above have limitations:oThey can be difficultoTime-consumingoCostly to implementManagement may find it difficult to define SBUs and measure market share and growth These approaches focus on classifying current businesses but provide little advice for future planningMany companies have dropped formal matrix methods in favour of more customized approaches that better suit their specific situations Today’s strategic planning has been decentralized oCompanies are placing responsibility for strategic planning in the hands of cross-functional teams of divisional managers who are close to their markets Ex: Disney’s sound strategic management of its broad mix of businesses has helped it fare better than rival media companies Developing Strategies for Growth and Downsizing Designing the business portfolio involves finding businesses and products the company should consider in the future A firm must be careful not to make growth itself an objective
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oThe company’s objective must be to manage profitable growth Marketing has the main responsibility for achieving profitable growth for the companyoMarketing needs to identify, evaluate, and select market opportunities and establish strategies for capturing them Useful device for identifying growth opportunities is the product-market expansion grid oProduct-market expansion grid: portfolio-planning tool for identifyingcompany growth opportunities through market penetration, market development, product development, or diversification Market penetration:a strategy for company growth by increasing sales of current products to current market segments without changing the product oIt might add new stores in current market areas to make it easier for customers to visit Ex: Starbucks plans to add 3000 new stores over the next few years Improvements in advertising, prices, service, menu selection, or store design might encourage customers to stop by more often, stay longer, or buy more during each visit oEx: Starbucks is remodeling many of its stores to give them more of a neighbourhood feel- earth tones, wood counters, and handwritten menu boardsTo boost business beyond the breakfast rush, Starbucks has added an evening menu in some markets featuring wine, beer and tapas Starbucks might consider possibilities for market development- identifying and developing new markets for its current products oManagers could review new demographic markets o
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  • Spring '15
  • Marketing, SBUs,  Mission statements

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