Core Business Strategies & BCG Matrix Limitations

Classified in Economy

Written on July 30, 2025 in English with a size of 2.27 KB

Concentration Strategies

Expansion of operations into other geographic locations and/or increasing the range of products and services offered to current markets.

The degree to which a firm operates in multiple geographic locations at the same point on an industry’s value chain.

Growth into a related industry when a firm has a strong competitive position but attractiveness is low.

The concept that two businesses will generate more profits together than they could separately.

Used when the firm has a weak competitive position in some or all of its product lines due to poor performance.

Emphasizes the improvement of operational efficiency when the corporation’s problems are pervasive but not critical.

An effort to quickly “stop the bleeding” across the board in terms of size and costs.

Stabilization of the new, leaner corporation.

A company gives up independence in exchange for security.

Management can still obtain a good price for its shareholders, and employees can keep their jobs by selling the company to another firm.

Sale of a division with low growth potential.

A company gives up management of the firm to the courts in return for some settlement of the corporation’s obligations.

Management terminates the firm.

Unfortunately, the BCG Growth-Share Matrix also has some serious limitations:

The use of highs and lows to form four categories is too simplistic.
The link between market share and profitability is questionable.
Growth rate is only one aspect of industry attractiveness.
Product lines or business units are considered only in relation to one competitor: the market leader. Small competitors with fast-growing market shares are ignored.
Market share is only one aspect of overall competitive position.

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