Week 7 Lecture Activity:
HOW TO DEVELOP AND USE THE BCG MATRIX
THE TASK
Your task is to conduct a portfolio analysis for South East Leisure and present the results in the form a BCG Matrix, with recommendations, to your Board of Directors. The relevant data for each strategic business unit (SBU) are presented in the table at the bottom of the page, and the characteristics of a BCG Matrix are described below (and in your text). CHARACTERISTICS OF MATRIX
Two dimensions – competitive strength and market attractiveness
Four quadrants
Circles for each product, brand, SBU represents sales volume
Rate of market growth represents market attractiveness and is the vertical dimension Relative market share represents competitive strength and is the horizontal dimension DRAW THE MATRIX
Collect, sort and analyse data (see table below)
Draw two axes and label them (as explained above)
For the vertical axis, the cut-off for market growth (midpoint) is 10%
For the horizontal axis, the cut-off for relative market share (midpoint) is 1
Calculate the relative market share for each SBU (SBU’s sales relative to its market leader, or its next biggest competitor if it is a leader)
Mark spot on the matrix where each SBU should be placed
Roughly calculate the size of the circle that represents each SBU according to its sales
THE DATA:
South East Leisure
SBU:
$M
sales
No of
competitors
$M sales
of
industry
leader
$M sales
of 2nd
industry
leader
Market
growth
%
Relative
Market
Share
Brisbane 1.0 7 1.4 1.4 15 Sydney 3.2 18 3.2 3.2 20 Noosa 4 3 5 0.8 7 Auckland 6.6 5 6.6 3.3 4 Cairns 0.7 9 3.0 2.5 4。