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Strategic Marketing Management - Essay Example
Auditing tools are techniques which aid managers in understanding the current situation of a company to be able to come up with strategies that will enable them to attain company goals. Auditing tools significantly bridge the gap between where the company "is" and where it "wants to be." Portfolio analysis tools are auditing tools which are used to identify and evaluate the various business makeup of a business entity…
However, it should be noted that portfolio analysis tools should be applied with caution as each of the individual technique has limitations. These are further elaborated on the discussion of the different tools. The three main portfolio planning tools are The Boston Consulting Group Growth-share Matrix, General Electric Market Attractiveness Competitive Position Model, and Shell Directional Policy Matrix.
The Product Life Cycle (PLC) as a portfolio analysis tool highlights four stages in a product's life cycle-introduction, growth, maturity and decline. This technique stresses that products life is limited and each stage in the life cycle offers different levels of potential gains. Thus, companies should employ the right strategies to maximize cash flow. PLC is valuable as a marketing tool because it emphasizes product termination, growth projections, different marketing objectives and strategies in each stage, product planning, and dangers of overpowering. However, it is also recognized that PLC is limited as each product follows a unique life cycle (e.g., fads and classics), PLC is the result of marketing efforts and not the cause, the time span of each stage is unpredictable, and misleading objectives and strategies.
The PLC can always be a good tool choice for compani ...