- When did the BCG experience-curve begin to have a significant impact on business thinking?
The experience curve is one of the best known and one of the signature concepts of BCG . The experience curve theory was generated during a cost analysis performed by BCG for a major semiconductor manufacturer in 1966 and held that the unit production cost of a company would decrease by a particular amount (which is estimated to be nearly 20% to 30%) for each doubling of the experience or accumulated production volume . The experience curve theory has been a valuable descriptor and a predictor of competitive dynamics in business through the 1970’s and provided a sound foundation for investment and pricing decisions and a valuable strategic tool .
- Was the BCG Growth-Share Matrix of any value in the 1990s?
- What is the new economics of information redefining?
The new economics of information have eliminated the trade-off between richness and reach, which has blown apart the foundations of traditional business strategy . BCG has revealed the way the connectivity spread and the common standards has redefined the information channels that establish a relationship of businesses with their customers, suppliers, and employees .
- What is the status of vertically integrated value chains?
The end of the last century had witnessed the constitution of the value chains that were vertically integrated and had defined modern business; but the end of this century is witnessing their deconstruction . The markets are encroaching on the internet of proprietary arrangements which may have been responsible for holding these chains together and in the process, the boundaries which define businesses, companies, and industries are coming under attack which have radically transformed the nature of competition .
- Write a short paragraph regarding your opinion of the Boston Consulting Group and/or the value of the Growth-Share Matrix.
BCG matrix is a very useful strategic analysis tool. The BCG matrix is a portfolio strategy used by managers to categorize their businesses by growth rate and relative market share, helping them decide how to invest corporate funds This tool was developed with an aim to assist companies and business groups in the accurate measurement of all their company businesses on the basis of relative market share and market growth . The matrix provides an overall image of the strategic position of each company business unit to help managers in deciding the strengths and needs of the various sectors of the firm .
- As your final paragraph, write a lessoned learned paragraph
BCG matrix is still relevant in the current time in spite of the fact that more than 40 years have passed since its inception. Harvard Business Review has recently named BCG matrix as one of the frameworks that changed the business world . In the late 1970s and early 1980s, the growth share matrix and the various approaches based on it were used by about half of all Fortune 500 companies . The BCG matrix provided a perfect business logic to redeploy cash from cash cows to business units with higher growth potential for various conglomerates and diversified companies . The matrix also equipped companies with a simple yet powerful tool to maximize their competitiveness, value, and sustainability of their businesses .
In a changing business world, the market share is not a direct predictor of sustained performance anymore and in addition to share, new drivers of competitive advantage, including the adaptation to changing circumstances or to shape them are seen .
The BCG matrix has not lost its value in the current business scenario; but it needs to be applied speedily with a focus on strategic experimentation to allow the business adapt efficiently to the dynamic business environment . The matrix also requires a new measure of competitiveness as a replacement of its horizontal axis since the market share is no longer a strong predictor of performance . To conclude, the matrix needs to be embedded more deeply in organization behavior to enable its use for experimentation of strategies .
Works Cited
Evans, Philip and Tom Wurster. Blown to Bits How the New Economics of Information Transforms Strategy. 1 January 2000. https://www.bcgperspectives.com/content/articles/strategy_growth_blown_to_bits_book/. 24 June 2014.
Ma, Tony. Professional Marketing and Advertising Essays and Assignments. Tony Ma, 2014. Hardcover.
Nippa, Michael, Ulrich Pidun and Harald Rubner. "Corporate Portfolio Management: Appraising Four Decades of Academic Research." Academy of Management Perspectives (2010). https://www.bcg.com/documents/file97207.pdf.
Reeves, Martin, George Stalk and Filippo L. Scognamiglio Pasini. BCG Classics Revisited: The Experience Curve. 28 May 2013. https://www.bcgperspectives.com/content/articles/growth_business_unit_strategy_experience_curve_bcg_classics_revisited/. 24 June 2014.
Reeves, Martin, Sandy Moose and Thijs Venema. BCG Classics Revisited: The Growth Share Matrix. 4 June 2014. https://www.bcgperspectives.com/content/articles/corporate_strategy_portfolio_management_strategic_planning_growth_share_matrix_bcg_classics_revisited/. 24 June 2014.
Stern, Carl. The Deconstruction of Value Chains. 1 September 1998. https://www.bcgperspectives.com/content/articles/alliances_joint_ventures_business_unit_strategy_deconstruction_value_chains/. 24 June 2014.
