Performance AnalysisPerformance Analysis

Lecture by Lecture by Murad RattaniMurad Rattani

Oxford College of LondonOxford College of London

Performance AnalysisPerformance Analysis

Performance Analysis of a business or a Performance Analysis of a business or a company can be done by two methods:company can be done by two methods:

1.1. Boston Consulting Group (BCG)Boston Consulting Group (BCG)2.2. Product Life Cycle (PLC)Product Life Cycle (PLC)

Boston Consulting GroupBoston Consulting Group

Boston Consulting GroupBoston Consulting Group

STARSSTARSCompanies operating in higher industry Companies operating in higher industry

growth rate with high market share.growth rate with high market share.

CASH COWSCASH COWSCompanies operating in low industry growth Companies operating in low industry growth

rate with high market share.rate with high market share.

Boston Consulting GroupBoston Consulting Group

QUESTION MARKQUESTION MARKCompanies having low market share and Companies having low market share and

high industry growth rate.high industry growth rate.

DOGSDOGSCompanies having low market share in a Companies having low market share in a

low industry growth rate industry.low industry growth rate industry.

Product Life CycleProduct Life Cycle

Stages of Product Life cycleStages of Product Life cycle

1.1. IntroductionIntroduction2.2. Growth Growth 3.3. MaturityMaturity4.4. DeclineDecline

Implications of Marketing Mix Implications of Marketing Mix during different stages of PLCduring different stages of PLC

IntroductionIntroductionAt this stage the company builds At this stage the company builds

products awareness and develops the products awareness and develops the market for the product.market for the product.

Product: Branding and quality level is Product: Branding and quality level is established. Property rights and established. Property rights and trademarks are obtained.trademarks are obtained.

Introduction stageIntroduction stage

Price: either market penetration strategy or Price: either market penetration strategy or market skimming strategy is adoptedmarket skimming strategy is adopted

Place: Distribution is selective Place: Distribution is selective

Promotion: bring awareness and educate Promotion: bring awareness and educate the market about the product. Mainly the market about the product. Mainly aimed at innovators and early adopters.aimed at innovators and early adopters.

Growth stageGrowth stage

GrowthGrowthTo increase market share and build To increase market share and build

brand preference.brand preference.Product: Quality is maintained and Product: Quality is maintained and

additional features may be added.additional features may be added.Pricing: it is maintained as the firm enjoys Pricing: it is maintained as the firm enjoys

less competition and increase in demand.less competition and increase in demand.

Marketing Mix during Growth stage Marketing Mix during Growth stage of PLCof PLC

Place: Distribution channels increase as Place: Distribution channels increase as demand increases and customers accept demand increases and customers accept the product.the product.

Promotion: aimed at broader audience.Promotion: aimed at broader audience.

Maturity stageMaturity stage

MaturityMaturityAt this stage the sale diminishes. There At this stage the sale diminishes. There

is increased competition. The main aim is increased competition. The main aim of the company is to defend market of the company is to defend market share with profitability.share with profitability.

Maturity stageMaturity stage

Product: differences may be enhanced to Product: differences may be enhanced to differentiate the products with the differentiate the products with the competitors.competitors.

Price: reduced because of competitionPrice: reduced because of competition

Maturity stageMaturity stage

Distribution: It may become intensive and Distribution: It may become intensive and incentives may be offered to build incentives may be offered to build preference over competing products.preference over competing products.

Promotion: emphasizes over product Promotion: emphasizes over product differentiationdifferentiation

Decline stageDecline stage

DeclineDecline

At this stage, the sales decline as the At this stage, the sales decline as the product can either get obsolete or suffer product can either get obsolete or suffer reduced demand or lack of innovation.reduced demand or lack of innovation.

Decline stageDecline stage

During decline stage, the firm has got During decline stage, the firm has got different options:different options:

Product development strategyProduct development strategyHarvest the product: reduce the cost and Harvest the product: reduce the cost and

continue to sell it to loyal or laggards continue to sell it to loyal or laggards customers.customers.

DivestmentDivestment

ReferencesReferences

• Philip Kottler, Marketing Management, The Philip Kottler, Marketing Management, The Millennium Edition, 2000.Millennium Edition, 2000.

• www.bettermanagement.com• www.valuebasedmanagement.net