First Medical Group
The distribution of services for the first client revealed the main problems, one of which is the possibility of planning failures in the long run. It means that the efforts of managers are directed to the promotion of offers with dubious profitability while they should be more concerned with those which are clearly beneficial. This outcome is conditional upon the presence of a significant share of problem children, which poses a threat to the organization’s efficiency in the future. Even though the market conditions are favorable for their development, it seems unreasonable to fund their development when only 10% of stars exist (“Question mark in the BCG matrix,” 2021).
Moreover, such a policy can lead to the need to set low prices and improve the quality of the offer without having any guarantees of its feasibility (“Question mark in the BCG matrix,” 2021). Therefore, the principal measures for improving their productiveness should be focused on this aspect of the matter.
As can be seen from the above challenge, another issue, which can potentially have an adverse impact on the organizational activity of the first company, is the insufficient number of stars. This situation correlates with the establishment of an unfavorable position of this entity on the market (Hart, 2021). For example, the competitors who spend more money on the realization of the products in this category might benefit from an earlier entry. In this case, the longer the company ignores the necessity to increase the share of stars, the more difficult it will be to increase profitability by developing them in the future (Hart, 2021). In this way, the second area, which presents a threat from the perspective of leadership in the field, is the neglect of potential sources of generating income.
Second Medical Group
In the second group, the distribution of services indicates the necessity to gain funding for remaining profitable in the future. This conclusion is based on the costs of the current products, which allow promoting them in the market. As follows from the received data, the majority of services are stars and problem children, and this situation seems alarming as they both require significant cash investment. In the former case, the development of offers in a fast-growing market is accompanied by the presence of numerous competitors, which also strive to benefit from the favorable environment (Hart, 2021).
Their activity indicates the necessity to spend money on advertising, which cannot be profitable for all goods marked as stars (Hart, 2021). Meanwhile, the latter category implies the creation of an effective distribution network and improving the quality and features of products (“Question mark in the BCG matrix,” 2021). These tasks are also costly, and reconsidering them seems an optimal solution for determining the actual advantages of further promotion.
Another factor, which should be addressed by the managers, is the risk of unexpected changes in the market. They might lead to a shift in customer preferences, and the existing cash cows will cease being profitable (Hart, 2021). In this case, the mentioned orientation of the company on the development of measures for expanding their market share while using stars will have negative effects on the business. The impossibility of receiving enough money for the promotion of these services deriving from the shift in the environment will eventually indicate fewer opportunities for funding. From this point of view, the transition of offers to the category of cash cows is a more critical task than the realization of stars.
References
Hart, D. (2021). The BCG matrix: How to strategically improve your product portfolio. The Power MBA. Web.
Question mark in the BCG matrix. (2021). Penpoin. Web.