Business Administration 2257 Study Guide - Quiz Guide: Cash Flow, Child Ballads
10 Nov 2020
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Document Summary
Boston matrix: framework used to handle complexity of having portfolio of product/market offerings, each at different stage of life. Market attractiveness: growth and profit potential of market (vertical axis) Strength of product in market: sales, relative market share etc (horizontal axis) Strategy with boston matrix: lighter circles: present product positions, darker circles: possible future positions, size: proportionate to turnover activity. If products a&b are commodities (selling on price) there are implications on strategy & cash flows for product c = if fails, may: reviewing strategy. Out of one product: expansion: into star, extension: into problem child become killed dog; if succeeds, may become star. Surplus from cash cow can be used to reinvest in problem child: ideal firm: self-financing. Abc analysis: measures success in terms of total contribution product makes towards fixed costs in relation to its sales within context of overall product portfolio: diagonal line: average contribution margin.
