Limitations / Problems Of Bcg Essays - Strategic Management

Limitations / Problems Of Bcg Limitations / problems of the BCG Matrix 1. The problems of getting data on the market share and market rate 2. There is no clear definition of what constitutes a market 3. A high market share need not necessarily lead to profitability all the time. 4. The model employs only two dimensions market share and growth rate. This may tempt management to emphasis a particular product or divest prematurely. 5. Low share businesses can be profitable too. 6. It considers the product or SBU only in relation to one competitor: the market leader. It misses small competitors with fast growing market shares. Critiques of BCG Matrix 1. In another word: by definition, only a single company can have a share greater than 1.0 in any given market. Thus, in the BCG matrix, there can be but one cash cow or one star per market. 2. The BCG model implies resource allocation rules regarding cash usage. Assumptions of BCG 1. This matrix assumes that a larger market share in a growth market leads to profitability. An effort to obtain a large market share in a slowly growing market requires too much cash. 2. The higher the growth rate, the easier to gain market share Uses / Application of BCG Matrix 1. If a company is able to use the experience curve to its advantage, it should be able to manufacture and sell new products at a price low enough to get early market share leadership. Once it becomes a star, it is destined to be profitable. 2. BCG model is helpful to management in evaluating the firms current balance among stars, cash cow, problem child and dogs. 3. BCG model is applicable to large companies that seek volume and experience effects. 4. The model is simple and easy to understand. 5. It provides a base for management to decide upon and prepare for contingent future courses of action. BCG as a planning tool 1. The BCG growth share matrix is widely used as a strategic planning tool giving planners a sense of direction. 2. The matrix facilitates the strategic planning process and service as a rich source of ideas about possible strategic options. 3. In multi-product organizations, management can use this matrix as a guide to allocate limited resources. BCG MATRIX 22% 10% market growth rate 0% 10x 1.5x 1x 0.1x Relative market share 1. The BCG matrix is plots the businesss relative competitive position as expressed by the market share and the growth rate of its industry on the vertical axis. The company is represented by as a circle on the matrix. The diameter of the circle represents the size of the business (usually in terms of the sales) in relation to the sizes of other businesses in the portfolio. 2. Market growth rate: represent the annual growth rate of the market in which the business operates. 10% is considered high. 3. Relative market share: refers to the SBUs market share relative to that of its largest competitor in the segment. It serves as a measure of the companys strength in the relevant market segment. 0.1x means that the companys sales volume is 10% of the leaders sales volume. 4. Question marks: - - business that operate in high-growth market but have low relative market shares. Most business start off as question marks. A question markets requires a lot of cash to spend on plant, equipment to keep up with the fast-growing market. 5. Stars: if the question marks are successful, it becomes a star. A star is the market leader in a high growth market. A star does not necessarily produce a positive cash flow for the company. The company must spend substantial funds to keep up the high market growth and fight off competitor attacks. 6. Cash cows: When a markets annual growth rate falls to less than 10 percent, the star becomes a cash cow if it still has the largest relative market share. A cash cow produces a lot of cash for the company. The company does not have to finance capacity expansion because the markets growth rate has slowed down. Because the business is the market leader, it enjoys economies of scale and higher profit margins. Cash cows can be used to support other businesses 7. Dogs: Dogs are businesses that have weak market shares in low growth markets. They typically generate low

Huey Newton, Co-Founder of Black Panther Party

Huey Newton, Co-Founder of Black Panther Party Huey Newton was an African American political activist who co-founded the Black Panther Party in 1966. When Newton was convicted for the fatal shooting of a police officer, his imprisonment became a common cause among activists in the United States. The slogan Free Huey appeared on banners and buttons at protests across the country. He was later released after two re-trials resulted in hung juries. Fast Facts: Huey Newton Known For: Co-founder of the Black Panther Party for Self DefenseBorn: February 17, 1942 in Monroe, LouisianaDied: August 23, 1989 in Oakland, CaliforniaEducation: Merritt College (A.A.), University of California at Santa Cruz (B.A., Ph.D.), Oakland City College (law classes, no degree), San Francisco Law School (law classes, no degree)Notable Quote: Political power comes through the barrel of a gun. Early Life and Education Huey P. Newton was born in Monroe, Louisiana, on February 17, 1942. He was named after Huey P. Long, the former governor of Louisiana who became notorious as a radical populist in the early 1930s. In 1945, Newtons family moved to California, drawn by the job opportunities that arose in the Bay Area as a result of the wartime industrial boom. They struggled financially and moved around often throughout Newtons life. He completed high school- which he later described as an experience that nearly killed [his] urge to inquire- without being able to read (he later taught himself). After high school, he earned an A.A. degree from Merritt College and took law school classes at Oakland City College. Starting in his teen years and continuing through college, Newton was arrested for crimes like mostly petty crimes such as vandalism and burglary. In 1965, when he was 22 years old, Newton was arrested and convicted of assault with a deadly weapon and sentenced to six months in jail. Most of his sentence was served in solitary confinement. Founding the Black Panther Party During his time at Oakland City College, Newton joined the Afro-American Association, which inspired him to become politically and socially conscious. He later said that his Oakland public education had made him feel ashamed of being black, but that his shame began to transform into pride once he encountered black activists. He also began reading radical activist literature, including works by Che Guevara and Malcolm X. Newton soon realized that there were few organizations advocating for lower class African Americans in Oakland. In October 1966, he joined up with Bobby Seale to form a new group, which they called the Black Panther Party for Self Defense. The organization was focused on fighting police brutality in Oakland and San Francisco. With Seale as chairman and Newton as minister of defense, the Black Panthers quickly assembled a membership and began patrolling Oakland neighborhoods. When police were spotted interacting with black citizens, the Panthers would approach and inform the civilians of their constitutional rights. Newton took part in such actions, sometimes while brandishing a law book. The organization adopted a uniform of black leather jackets, black berets, and sunglasses. This distinct uniform, as well as their prominent display of guns and bandoliers of shotgun shells, made the Black Panthers highly noticeable. By the spring of 1967, stories about Newton and the Black Panthers began appearing in major publications. Guns and Political Power The Black Panthers encouraged black citizens of Oakland to begin carrying firearms, citing their Constitutional right under the Second Amendment, and tensions between police and the Black Panthers continued to grow. An article published in the New York Times on May 3, 1967 described an incident in which Newton, Seale, and about 30 other Black Panthers strode into the California capitol in Sacramento with their weapons prominently displayed. The story was headlined Armed Negroes Protest Gun Bill. The Black Panthers had arrived in dramatic fashion to voice their opposition to a proposed law against carrying firearms. It seemed the law had been drafted specifically to curtail their activities. Weeks later, in another article in the New York Times, Newton was described as being surrounded by armed followers in an apartment in San Franciscos Haight-Ashbury neighborhood. Newton was quoted as saying, Political power comes through the barrel of a gun. Arrest and Conviction About a year after the Black Panthers first rose to prominence, Newton became entangled in a high-profile legal case. The case centered around the death of John Frey, who died after pulling over Huey Newton and a friend for a traffic stop. Newton was arrested at the scene. In September 1968, he was convicted of voluntary manslaughter and received a sentence of two to 15 years in prison. Newtons incarceration became a major cause among young radicals and activists. Free Huey buttons and banners could be seen at protests and anti-war rallies nationwide, and rallies for Newtons release were held in numerous American cities. At the time, police actions against Black Panthers in other cities made headlines. In May 1970, Newton was granted a new trial. After two trials were held and both resulted in hung juries, the case was dropped and Newton was released. The specific events, as well as Newtons potential culpability, surrounding John Freys death remain uncertain. Later Life Following his release from prison in 1970, Newton resumed leadership of the Black Panthers and began studying at the University of California at Santa Cruz, where he earned a B.A. in 1974. After a period of relative quiet, Newton was charged with the murder of a teenage sex worker named Kathleen Smith. He was also arrested for assaulting his tailor. Newton fled to Cuba, where he lived in exile for three years. In 1977, Newton returned to California, asserting that the political climate in the United States had changed enough that he could receive a fair trial. After juries were deadlocked, Newton was acquitted of the murder of Kathleen Smith. He returned to the Black Panther organization, and also returned to college. In 1980, he received a Ph.D. from the University of California at Santa Cruz. He wrote a thesis about the repression of the Black Panthers. Death and Legacy In the 1980s, Newton grappled with drug addiction and alcohol abuse. He remained involved with neighborhood programs pioneered by the Black Panthers. However, in 1985, he was arrested for embezzling funds. He was later arrested on a weapons charge, and was also suspected of being involved in the drug trade. In the early hours of August 23, 1989, Newton was shot and killed on a street in Oakland, California. His killing was reported on the front page of the New York Times. Tyrone Robinson confessed to the murder, and it was concluded that the killing was connected to Newtons significant debt caused by his cocaine addiction. Today, Newtons legacy is one of leadership within the Black Panther Party, as well as his controversial convictions and allegations of violence. Sources Nagel, Rob. Newton, Huey 1942–1989. Contemporary Black Biography, edited by Barbara Carlisle Bigelow, vol. 2, Gale, 1992, pp. 177-180. Gale Virtual Reference Library.Huey P. Newton. Encyclopedia of World Biography, 2nd ed., vol. 11, Gale, 2004, pp. 367-369. Gale Virtual Reference Library.Spencer, Robyn. Newton, Huey P. Encyclopedia of African-American Culture and History, edited by Colin A. Palmer, 2nd ed., vol. 4, Macmillan Reference USA, 2006, pp. 1649-1651. Gale Virtual Reference Library.Associated Press. Huey Newton Killed; Was a Co-Founder Of Black Panthers. New York Times, 23 August 1989, p. A1.Buursma, Bruce. Newton Slain In Drug Dispute, Police Say. Chicago Tribune, 27 August 1989.