Product Management Using Boston Matrix Tool with Product Life Cycle Management - Essay Example

Product Management Using Boston Matrix Tool with Product Life Cycle Management 9th March Introduction In his efforts to make planning simpler for the organizations, Bruce Henderson came up with the Boston Matrix model. Having being created by Boston Consulting Group, the matrix is used to classify business portfolio of an organization portfolio. The four quadrants that Boston Matrix has include stars, question marks, cash cows and dogs (Ovidijus, 2013). BCG involved 4 major categories that were based according to the market growth and market share. While the market growth is concerned with company or market attractiveness, the market share is focused at analyzing the largest competitors. In addition, the market share indicates the strategies that are adopted by fir ms in order for them to have a competitive advantage over the other companies. This paper aims at discussing the strategic effects of Boston Matrix model for the Abuja Energy Surveillance (AES) and how it can impact on its 10 year strategic market share plan for the system. The paper will consider the entire analysis and description of the application of Boston Matrix tool on the system developed by AES limited. Additionally, the paper will provide recommendations on the strategies that are required for successful commercialization of oil and gas pipeline monitoring systems in each stages of Abuja Energy Surveillance limited life cycle. One of the major strategic implications of Boston Matrix on Abuja Energy Surveillance limited is that in the next 10 years it will result into maintenance of the company’s competitive advantage that is associated to its control over the oil, theft of the gas and spillage that is experienced along the pipelines. The model will also have an impact on the company’s strategic market share plan for the system since it will incorporate mature market. This implies that Abuja Energy Surveillance limited is not a new entrant in the market and thus it can only progress without challenges that can act as obstacles to establish the strategic market plan for the next 10 years. Abuja Energy Surveillance has the opportunity of using Geographic Information System and drones to manage oil, address gas theft and spillages along the pipelines and its objectives are likely to be attained within a given time frame. Based on the fact that Abuja Energy Surveillance limited has been operating for quite some time, it has been in a position to solve emerging challenges and thus the company will be in a position to achieve the strategies as indicated in its ten year strategic plan (Inkpen and Moffett, 2011). One of the notable implications Abuja Energy Surveillance will have is that since it has come up with ways of dealing with the theft, spillage along the pipelines, it will significantly prevent the environmental degradation. For instance, the water and air pollution that the can be experienced along the pipelines will be minimized or eliminated by following the strategies that the company will come up with (Pine and Gilmore, 1997). It is worth to note that water that is neighboring the pipelines is likely to be polluted due to spillage and thus it is important for the pipes to be made lick proof by adopting more effective methods of oil transportation. The ten year strategic plan will assist the Abuja Energy Surveillance to come up with a product line that that will be beneficial to the organization. For instance, as a cash cow, the company will adopt a market share that has low growth since Abuja Energy Surveillance dominates the market. The scenario can become better the strategic plan of the company since it will expand its other services and projects by plowing back the profits earned. Ultimately, this will have a significant implication on the company since it can initiate other projects that can be used to reduce gas theft, oil spillage and theft. In addition, since Abuja Energy Surveillance dominates the market, it will have a competitive advantage over the other companies. A notable effect of Boston Matrix model is that it will provide a picture of the contemporary position of the systems that Abuja Energy Surveillance has initiated thus effectively assessing the performance of the company. In addition, it will be possible to identify the future prospect of the company. If Abuja Energy Surveillance growth rate is noted to be relative to the market share by looking at the Boston Matrix model 4th quadrant, it is an indication that the organization can notice whether it has unbalanced or balanced portfolio. In case the management notice that the portfolio is unbalanced, then it implies that the company is being faced with many dogs or problems and thus few stars and cash cows are available for the firm. An addition application that is related to Boston Matrix model is the build strategy. This implies that the question marks that are known to create small market share can be converted to stars. One of the key issues about the stars is that they create a higher growth due to their absolute market share. In the case Abuja Energy Surveillance converts the question marks into stars, it will enjoy competitive power and the management can now transact their businesses without being afraid of the threats that can be generated by the competing firms. Boston Matrix model also creates a hold strategy. For Abuja Energy Surveillance, this can be applied in the cash cow section based on the fact that it can increase its cash (Mulcaster, 2009). Instead of using the cash generated to conduct internal activities, the management can use the cash to initiate external projects that can also generate more cash as well creating growth opportunities for the company as well as the employees. Another important application of the matrix is that it has a harvest strategy. This indicates the short-term cash that is flowing to the business. For the business, the cash does not create a growth due to the fact that the question marks cannot be converted into cash. Boston Matrix model emulates a project life cycle that starts with the stars. One of the notable issues about the stars is that with the business environment, they generate high revenue since they enjoy an expansive market share. In addition, the stars enjoy high growth rate thus taking in a lot of cash. One of the recommendations for Abuja Energy Surveillance in its commercialization of gas and oil transmission is to establish an effective mode of transport. This would entail initial inspection of the oil and pipelines to avoid any spillage as well as ensuring the products are transported to the designated place. Abuja Energy Surveillance second stage in the lifecycle covers cows. Cows are mostly noted as leaders within the business atmosphere due to their ability to generate high cash than what they use (Wit, 2011). Notably, the cows have a low rate of growth but a high market share. Within the Abuja Energy Surveillance, this stage of lifecycle can sustain the firm’s activities since the stage can generate more cash that the management can use to invest in other projects to maintain or improve the company profitability. Notable aspect of dogs is that they have low growth rate and reduced market share. Apart from remaining stagnant, they consume little or no resources for the company. For Abuja Energy Surveillance, the strategy required to be put in place within the monitoring systems is investing in machines that can be applied in detecting spillage of oil and gas during its transportation to the consumers or other destinations (Corner, Kinicki and Keats 1994). Question marks on their part are recognized due to their high growth even though their market share is little. Additionally, they take a lot of resources but have little return to an organization. For instance, within an organization that employees dot effectively cooperate, the company resources are extensively used but little results are generated. Abuja Energy Surveillance on this stage should invest in digital as well as automated equipments in manufacturing and transportation of oil and gas. Conclusion Within developing and developed countries, transportation of oil and gases has generated a number of challenges. Apart from the regular spillage, cases of theft have been experienced thus resulting to high losses for companies. In addition, the pollution due to the spillage has created negative image for some companies while other have faced legal mitigation resulting to more losses (Scott and Roderick, 1994). This implies that just as Abuja Energy Surveillance has adopted ways of dealing with the oil transportation challenges, other companies in the industry should invest in modern ways of dealing with these problems. Through the application of the Boston Matrix model, companies within the oil and other industries should identify the strategies that they will adopt in or to remain competitive or face off their rivals. Additionally, managers should take time to study the implication of their strategies to avoid loss of resources or opportunities. In this way, the companies’ profitability and sales will increase significantly. References Corner, P. Kinicki, A. and Keats, B. Integrating organizational and individual information processing perspectives on choice, Organizational Science, vol. 3, 1994. Inkpen, A., & Moffett, M. 2011. The global oil & gas industry management, strategy & finance. Tulsa, Okla.: PennWell. Ovidijus, J. 2013. BCG growth-share matrix. Available from www.strategicmanagementinsight.com/tools/bcg-matrix-growth-share.html Pine, J. and Gilmore, J. The Four Faces of Mass Customization, Harvard Business Review, Vol 75, No 1, Jan–Feb 1997. Scott A and Roderick J. 1994. Effects of portfolio planning methods on decision making: experimental results. International Journal of Research in Marketing (Science Direct) 11 (1): 71–82. Wit, M. 2011. Managing the New Public Services. New York: Sage. Mulcaster, R. 2009. Three Strategic Frameworks, Business Strategy Series, Vol 10, No1, 68 – 74. Read More