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Gale Nichols
Student (University), Trinidad and Tobago
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BCG Matrix Star Strategies and Examples
What type of strategy and policies may be used by an organization or business unit for a product line which falls into the category "Star" in the BCG Matrix?
Can you give an example of a company employing such Star Strategy?
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melchiorre calabrese, Italy
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Strategies that can be Used for Star Position The primary concern of a company that is located in a "STAR" position should be to defend that position. In fact no position is without danger or everlasting. The defense must include:
1. Achieving investments characterized by a rapid return and commensurate with the cash flow of the specific "STAR" product.
2. Making small but continuous variations on the product in order to reduce the chances of losing the strong position because of the increasing competition.
Other actions would be suggested by an analysis of the market situation.
With regard to your request of some examples I cannot do those related to my direct experience for reasons of confidentiality. However, for examples that might be appropriate you could think about what some automotive or fashion industries often do.
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Mohamed Salem
Director, Egypt
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Strategies for a Star Category Business Forward, backward and horizontal integration; market penetration; market development and product development are appropriate strategies
For example MacDonald's, Apple iPhones, Samsung tablets.
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Jaap de Jonge
Editor, Netherlands
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Potential Strategies for Star SBUs A quick recap: When an SBU or product line is a STAR, that means that it has a High Market Share in a High-growth Market.
If a company has such a Star SBU or Star product line, this is obviously a really nice position to be in and the company should try really hard to keep or even extend its position. That would typically include investing heavily. Because the result will be an even bigger market share in a market that is growing quickly, which is an even nicer position than the current one.
Exactly HOW these investments should be made and what strategies should be used are questions that the BCG Matrix was not designed for.
I agree with @Mohamed Salem that:
- In terms of Ansoff's Growth Strategies, Market Penetration would be the first choice (Selling more of current product in current market).
- Horizontal Integration (e.g. acquiring competitors) should also be considered, to further reduce competition and increase economies of scale.
Many other strategies and tactics can also come into play, depending on the circumstances, vision and mission.
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Javier Elenes
Business Consultant, Mexico
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Strategies That SHALL be Used for Star Companies The strategy I recommend is to deliver at least 20% more value to the customer than your competitors. You can achieve this by improve the VALUE PACKAGE delivery to the customer.
To support that, I use a comparative V / P index, where
V = VALUE, measured with Quality index * Service index
Q index = Your Quality delivery / Quality best competitor in %(0-100)
S Index = Your Service / Service of best competitor in %(0-100)
P Index = Your Price charged / Price best competitor (base 100)
A STAR SHALL have a V / P index above 1.2, meaning you give 20% more VALUE than your best (biggest global) Competitor.
An example of such situation would be the following case:
a. The Quality of your best competitor is 80% and you are at 88%
b. The Service of your best competitor is 80, and you are at 88%
c. The Price of your best competitor is 100, and you are also 100 (prioces are the same),
In such case (a+b+c), your V/P Index = (88/80 * 88/80) / (100/100) = 1.1 * 1.1 / 1.0 = 1.21
Congratulations, but remember you still have room to improve your VALUE).
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ANUJ KUMAR SHRIVASTAVA
Manager, India
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BCG Matrix Hidden Facts Remember a Star can change to a Dog anytime. The BCG Matrix just shows you the CURRENT position of the product.
Star positions and products are attractive and competitors will try to copy them. So there is a need to make continuous innovations to defend against such competitors/imitators and to ensure that your star doesn't change to a dog in your next BCG Matrix!
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melchiorre calabrese, Italy
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BCG Matrix Hidden Facts @ANUJ KUMAR SHRIVASTAVA: I agree to your suggestion; it really is connected to my second item of "Strategies that can be used for Star Position.
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Afari, Iran
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Star Product Strategy Continuous improvement both in the product and services rendered to the customers - in relation to the product cost and delivery time - is my proposed strategy.
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Zeb O. WATURUOCHA, India
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Star Product Strategy In addition to what have been suggested already, it is important to identify what puts the product into the star position. Strenthening the brand is important at this level for the organisation to improve towards to the next level.
Until this is done, maintaining the quality of the product at the star level is essential.
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