Why does Barry Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1) say that business growth is important when shaping strategy?
The relative market share effect makes it easier to see competitors’ moves in a growing market
It provides an opportunity to sell ‘dogs’, as competitors can’t realistically value them in a growth market
It is easier to capture market share in a market that is growing
Because of the high investment required in growth markets, it is difficult to recoup the investment.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), which of the following statements describes a ‘star’?
Often a cash trap; poor profits; difficult to achieve a viable cost position
High cash needs; low cash generation
They have a superior position; they generate cash surpluses; they have low reinvestment needs
They are leaders in the business; they use large amounts of cash to maintain their position; probably the best profit and investment opportunities for the firm.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), which of the following statements describes a ‘question mark’?
They have a superior position; they generate cash surpluses; they have low reinvestment needs
High cash needs; low cash generation
They are leaders in the business; they use large amounts of cash to maintain their position; probably the best profit and investment opportunities for the firm
Often a cash trap; poor profits; difficult to achieve a viable cost position.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), which of the following statements describes a ‘cash cow’?
They are leaders in the business; they use large amounts of cash to maintain their position; probably the best profit and investment opportunities for the firm
They have a superior position; they generate cash surpluses; they have low reinvestment needs
High cash needs; low cash generation
Often a cash trap; poor profits; difficult to achieve a viable cost position.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), which of the following statements describes a ‘dog’?
Often a cash trap; poor profits; difficult to achieve a viable cost position
High cash needs; low cash generation
They have a superior position; they generate cash surpluses; they have low reinvestment needs
They are leaders in the business; they use large amounts of cash to maintain their position; probably the best profit and investment opportunities for the firm.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), which of the following strategies should be adopted to turn a ‘question mark’ into a ‘star’?
Refocus the business; e.g. try to use focused differentiation to gain market share
Wait and see if it becomes a ‘dog’; then divest it
Invest heavily to turn it into a ‘star’
Invest to grow the overall market, or to increase the rate of market growth.
According to Hedley (‘Strategy and the business portfolio’, 1977, in De Wit & Meyer, 2010, Reading 6.1), what are the implications of a company not having any ‘dogs’ in its portfolio?
The firm should invest to turn the ‘dog’ into a ‘cash cow’
The firm has an unbalanced portfolio, but this is permissible in this situation
The firm has a balanced portfolio, and should strive to maintain it
The firm has probably not been sufficiently adventurous in the past.