Question

Please choose a company, describe its SBUs, and categorize those SBUs by using the BCG framework. The company could be a publicly traded company such as P&G, or it could also be a local small business that you are familiar with. The choice is yours!

Answer 1

The company choosen is Apple whith its SBUs classified as different product lines by the companies including Apple iPhones, Apple iPads, Apple MacBook, Apple TV, Apple iPods.

The SBUs can be categorised using BCG matrix. BCG matrix is tool to determine the strategy for a particular business unit or overall business portfolio based on market growth rate and relative market share of the products. The company can decide the investments in a particular category or business unit based on the industry attractiveness, relative market share and market growth rates for the products considering the competition and performance of the products.  The BCG matrix classifies the business units or product categories into four types Stars, Question Marks, Cash Cows, Dogs.

Stars - Products with high market market growth rate in with industry attractiveness and high market share are Stars. Apple iPhones can be classified as Stars. They products face high competition and high growth rates which require investments in marketing. The other Apple products like Apple iPads and Apple watch are also stars due to their growing popularity.

Question Marks - These are products which require high investments as they have low market share in a high growth rate industry. Apple TV is a product which has chances of success in long term but requires lot of investments and marketing efforts to build their presence in the industry.

Cash Cows - Products with consistent performance and lesser chances of increase in market share are categorised as Cash cows. The products have dominant market share but lower growth rates and are regular source of revenue in the business. Apple Macbooks with consistent market share with revenue generation but market growth rate is comparatively slow.

Dogs - Dogs are products which have relatively lesser market share and lower growth rates. The products are able to break even or sustain the market share but show no signs for further growth or increase in market share. Apple iPods can be categorised as Dogs as the product category is losing its popularity.