Strategic Marketing: Planning and Control, Third Edition

(Wang) #1
❍ The focus on market share and growth ignores fundamental issues
such as developing sustainable competitive advantage.
❍ Not all products face the same life cycle. Therefore for some stars
facing a short life cycle it may be better for the organisation to harvest
them, rather than committing further investment.
❍ Cashflow is only one factor on which to base investment decisions.
There are others to consider, such as return on investment, market size
and competitors.
There are a number of models that use a range of weighted criteria in
place of relative market share and growth in order to overcome some of
the limitations of the growth share matrix.
● The General Electric multifactor portfolio matrix
This model has two axes; market attractiveness on one axis and com-
petitive strength on the other. Industry/market attractiveness is
assessed on a range of weighted criteria including:
❍ Market size
❍ Market growth rate
❍ Strength of competition
❍ Profit potential
❍ Social, political and legal factors
Competitive strength is also assessed on a range of weighted criteria such as:
❍ Market share
❍ Potential to develop differential advantage
❍ Opportunities to develop cost advantages
❍ Channel relationships
❍ Brand image and reputation

104 Strategic Marketing: Planning and Control

Public-
sector star

Political
hot box

Golden
fleece

Back
drawer
issue

Level of the political requirement to

offer the service

High Low
Ability to effectively deliver the service

High

Low
Figure 5.9
Public sector
portfolio matrix
(Source: Adapted
from Montanari and
Bracker, 1986)

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