Mobile phones: Samsung Galaxy and Note Series are quite a hit among customers and have their own base of loyal customers. 2. The application of BCG Matrix for BMW Groups would help to identify the profitable and risky ventures being managed by the firm. The Number 2 brand Strategic business unit is a star in the BCG matrix of Customization at BMW as Customization at BMW has a 20% market share in this category. Hambrick, D. C., MacMillan, I. C., & Day, D. L. (1982). Its motorcycle and financial services units are considered to be question mark. Search Search How To Write A Proposal For A Research Paper? There are some products which do not show same level of promising future as indicated by cash cows and stars. The recommended strategy for BMW is to divest this strategic business unit and minimise its losses. (1984). (2002). It neglects the effects of synergy between brands. It was developed with the aim to help organizations differentiate between profitable and non- profitable ventures. Retrieved from https://www.press.bmwgroup.com/global/article/detail/T0259054EN/two-million-vehicles-sold:-the-bmw-5-series-is-the-world%E2%80%99s-most-successful-business-car-bestseller-for-six-years-and-regular-winner-of-reader-and-expert-polls?language=enDeMattia, N. (2015, January 7). Since these products are in high demand, the company is able to secure higher sales and return on investment (ROI) from these items as compared to its other product ranges. High margins and high market share go together. The analysis using BCG Matrix is based on a framework including four components: Star Cash cow Question mark Dog 5. In 2015, the company has achieved more than 10% increase in net profits in the second quarter. 4. However, it is expected that the market will grow in the future with environmental changes that are occurring. These strategic business units require close considerations whether the business should continue with them or divest. The overall benefit would be an increase in sales of BMW. 3. Ansoff matrix is a tool which helps organizations, like BMW, to develop strategy directions that they can follow, regarding the products range and markets, while considering the capabilities and stakeholder’s expectations of the organization. Rating. The BCG matrix … This will ensure profits for BMW if the market starts growing again in the future. | Gaining and Sustaining Competitive Advantage, 2nd ed. Let our expert writers work on your assignments and essays, Based on 8,560 Reviews, Policies BCG Matrix in the Marketing strategy of BMW. What is BCG matrix?The BCG matrix is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or product lines. The recommended strategy for BMW is to stop further investment in this business and keep operating this strategic business unit as long as its profitable. The recommended strategy for BMW is to invest in research and development to come up with innovative features. Only Toyota’sand Mercedes-Benz' brands can compete with BMW in both lists. Firm resources and sustained competitive advantage. VRIO Framework. This is an innovative product that has a market share of 25% in its category. BCG Matrix of Nestle. Jurevicius, O. These have been identified in the BCG matrix of BMW and recommended strategies to ensure such change have also been made. While BMW is the current luxury car market leader for the fourth time in five years, global estimates show that Mercedes-Benz will overtake BMW in 2016 (Automotive News, 2016). BMW recently announced its slowest sales growth in the last 7 years. 1.4MB . BCG Matrix. Strategic Management Journal, 5(1), 93-97. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. This business method bases its theory on the life cycle of products. It has also failed in the attempts made at innovation by research and development teams. The Boston Matrix mainly focuses on the dimensions of market share and market growth, as these aspects are considered important to identify the areas in which companies need to utilise resources in order to optimise their profit generation capacity (Kotler, 2006). It’s the brand which is famous for luxury cars and positioned in a same way in customer minds. BMW should use its current products to penetrate the market. Two million vehicles sold: The BMW 5 Series is the world’s most successful business car. The BCG matrix is a useful tool when a business plans to analyze its products and identify the growth chances of its different business segments. The Number 2 brand Strategic business unit is a star in the BCG matrix of BMW as BMW has a 20% market share in this category. The BCG growth-share matrix is a tool used internally by management to assess the current state of value of a firm's units or product lines. This is operating in a market segment that is declining in the past 5 years. Journal of management, 17(1), 99-120. [Controversial Recalls: The reputation of automakers declines whenever they recall cars.