FIGURE 1
Experience Curve
UNIT COST
1. 20
1.00
0.80
0.60
0.40
0.20
0.00
OUTPUT
0 5,000 10,000 15,000 20,000
FIGURE 2
Ansoff’s Matrix
Existing Products New Products
Existing Markets Market Penetration Product Development
New Markets Market Development Diversification
FIGURE 4
SWOT Analysis Framework
Helpful to Achieve
Objectives
Harmful to Achieve
Objectives
(Company) Strengths Weaknesses
External Origin
(Industry, Regulatory
Environment, etc.)
Opportunities Threats
FIGURE 3
Growth-Share Matrix
Market Share (Cash Generation)
Large Small
Market
Growth
(Cash
Usage)
High Stars Question Mark
Slow Cash Cows Dogs
FIGURE 5
Porter’s Five Forces (Industry Competition)
The Growth Share Matrix
Another powerful oversimplification was BCG’s Growth Share
Matrix, a portfolio planning model that classified business units
into four categories that were functions of market growth (a
proxy of market attractiveness) and market share (a proxy of
a company’s strength). The purpose of this model was to help
managers allocate resources among competing units, which the
model classified as:
■ ■ Stars—Business units with large market share in a fast-growing industry. Good candidates for investments.
■ ■ Question Marks—Business units with small market share
in a fast-growing industry. They require investments, but the
outcome is uncertain.
■ ■ Cash Cows—Business units with large market share in a
slow-growing industry. The advice is to use the cash they
generate to invest in other industries.
■ ■ Dogs—Business units with small market share in a slow-growing industry. Candidate should be liquidated (see Figure 3).
SWOT Analysis
Fortunately, some easy-to-use frameworks such as Strengths,
Weaknesses, Opportunities and Threats (SWOT) Analysis
proved valuable. SWOT was probably inspired by the military concept of Net Assessment although its academic origins
are disputed. Some give credit to Albert Humphrey, others to
George Albert Smith and C. Roland Christensen. The purpose
