Thursday, April 01, 2010

“International Markets: Stars, Cash Cows, Question Marks and Dogs” :The Cross-cultural Connector

In the 70s, the Boston Consulting Group developed the product life cycle matrix to help companies analyze their product portfolios for the purpose of strategic planning and effective resource allocation.



They divided products into 4 groups:

1. Low relative market share and low market growth rate: They called it a “dog” and recommended phasing out these products.

2. Low relative market share and high growth rate: They called these products a “question mark” and recommended investing in some.

3. High relative market share and high growth rate: They called this category a “star” and recommended heavily investing in them.

4. High relative market share and low growth rate: They called it a “cash cow” and recommended maintenance only, milking the product till it turns to a “dog” then phasing it out.

BCG emphasized the need for companies to have a product portfolio that contains products in all of the question mark, star and cash cow quadrants.

Fast-forward to the globalization era. Your geographical market portfolio should match your product life cycle matrix portfolio!

The same techniques and principles can be applied when appraising your international markets and how they rank within these four quadrants. Based on that, you can decide on the amount of resources to apply to product localization. (Read the Whole Story)

Your thoughts?

Amadou

Posted via web from amsall's posterous

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