In the following mini-case study, you are required to categorize the corporation’s business portfolio into the four boxes of the BCG (Boston Consulting Group) model. You then need to decide how the management should allocate $250 million funds available across their strategic business units (SBUs), using the BCG matrix as a guide.
ACTIVITY/TASK
The AHI Group is a hypothetical diversified firm operating in Australia. Created less than 20 years ago, AHI has clear goals of strong growth and achieving dominance in all the markets that it chooses to compete in. The corporation now has four SBU’s, as follows:
1. A chain of fast food restaurants (General Manager = Clive)
2. A manufacturer of MP3 players (General Manager = Kristi)
3. A ‘branding’ marketing consulting firm (General Manager = Therese)
4. A bus travel company (General Manager = Jamie)
It is strategic planning time at AHI and each of the General Managers are outlining their resource requirements with the founders. (Note: There is $250m available to reinvest into the business.) The following are some excerpts from the minutes of the meeting: