Current and future value and fit to the business: each product / service should be assessed to evaluate its current net financial contribution to the business and to the firm’s reputation. How each product / service or group of services fit with the corporate strategy is equally important. Trend and market analysis may well have shown changes that have taken place, are happening now or are forecast to occur over the next three years, that might positively or adversely impact some services. Decisions will need to be made as how to manage those servcies / products to maximise opportunities and minimise threats.
Stars v Dogs: simply put, many years ago, and still topical today, products / services can be categorised into four headings; cash cow, rising star, problem child and dog (otherwise known as The Boston Matrix).
All the organisation’s current products / services should be placed under one of these headings. Forecasts based on data collected earlier is likely to highlight where those products / services are leading; ie is your bread and butter service ( currently a cash cow funding development) going to continue or will it drop off and become a “dog”. Dogs have no value to the business and should be sold off, written off or discontinued.
“Problem” children can go either way and thus there ia an element of risk attached to keeping such products / services. The organisation needs to keep a tight rein on such “children” to ensure they become “rising stars” and not dogs.
“Rising stars” rise but the organisation needs to understand the life cycle of each of their rising stars as at some stage they will stop rising and some will even fall. There is also risk here as large amounts of money are often pumped into rising stars, long after the star is actually waning.
This is a fun but very strategic exercise that often clarifies what the firm should be offering and how to market its offers. |
