Write a new mission statement for the company. To be the acknowledged worldwide leader of supermarket in providing the highest quality products at a reasonable price, comfortable environment, a commitment to customer satisfaction, fair treatment of our suppliers and loyalty to our employees. Other than these, we strive to be your first choice, listen what you say and appreciate the opportunity to serve you. 2. Briefly describe Strategic Business Unit (SBU) and BCG matrix.Strategic Business Unit is understood as a unique business unit within a large corporation identity which is distinguishable from other business because it serves a defined external market where management can conduct strategic planning in relation to products and markets.
When companies become really large, they are best thought of as being composed of a number of businesses. The Boston Consulting Group matrix is a chart that was created by Bruce Henderson for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or product lines.The BCG matrix consists of a four-quadrant grid that is one of the most publicized techniques to help the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. Picture source: from internet Stars are SBUs in fast-growth markets with large relative market share. Substantial resources are required to support their dominant position. Stars offer excellent opportunities for future growth and profitability. Question marks are SBUs in high-growth industries but with a small market share.
They have the potential to gain market share and become a star, and eventually a cash cow when the market growth slows. In order to maintain their position in a growing industry, they normally require large net cash consumption. Cash cows are units with high market share in a slow-growing industry. They are in a mature market, and every corporation would be thrilled to own as many as possible. They are to be “milked” continuously with as little investment as possible, since such investment would be wasted in an industry with low growth.Dogs are units with low market share in a mature, slow-growing industry.
These units typically “break even”, generating barely enough cash to maintain the business’s market share. Dogs are sometimes referred to as cash traps because they invariably drain financial resources from healthier SBUs in the firm’s portfolio. Dogs, it is thought, should be sold off. Reference: Wikipedia Which position do you think the PleaseCome supermarket should be placed in BCG matrix? Why? I think the PleaseCome supermarket should be placed as cash cows in BCG matrix.
The industry of supermarket is said to be saturated and it has low market growth rate. The market share is ranked 3rd in Hong Kong and 4th in Macau that they have high market share but compete in a mature and low-growth industry. Although the overall net profit of the 108 shops in Hong Kong has been dropped for 10%, they can still generate cash for maintaining the business and they require little financial resources to build up the company.
The profits can be allocated to Stars and Question marks. 3. With the current economic situation, what strategies will you use?Explain your choice with supporting reasons.
Since there are 108 shops in Hong Kong and their overall net profit has been dropped for 10% compared with last year . In order to improve the current situation of the company, growth strategy should be used. In Hong Kong, growth strategy should be used to increase the market share. The market share is ranked 3rd in Hong Kong now, the target is to become the No. 1 within three years.
More 6-8 shops will be opened every year and therefore number of employees should be increased.Most of experienced staffs may be promoted to senior position, it can enhance their sense of community. Company may also grow by merging with other companies or acquiring similar firms. There are 12 shops start to losing money, they need to be closed if no improvement is done within one year. Besides, Hong Kong is suffering from inflation that the rent and the wholesale price of material are highly increased, so cost-leadership strategy can also be used to gain competitive advantage by producing goods and services more cheaply than competitor.By producing large quantity of standardized products, company hopes to take advantage of economies of scale and experience curve effects. In order to increase the sales revenue, the cost can be lower by bulk purchase, so we need to open more shops as we can. In Macau, the market is relatively small, so no new shop will be opened.
Growth strategy will be also implemented that company will acquire other similar supermarkets instead of opening new shops, the target market share is become 2nd in Macau within three years. In future, I hope PleaseCome supermarket become the largest supermarket in Hong Kong and in Macau.