Page 150 - BA1 Integrated Workbook STUDENT 2018

Subject E3: Strategic Management

7.3 PRB runs a multinational business and has a large number of subsidiary
companies in unrelated industries. It has decided to assess its strategy for each
subsidiary using the BCG matrix.

Which of the following subsidiary companies would the BCG suggest that
a ‘double or quits’ strategy should be adopted towards? Select ALL that
apply.

A Company A – which prints books and magazines. It operates in an
industry which has seen volumes shrinking in the last few years. A is the
second largest printer in its market.

B Company B – which is an accountancy training provider. It has a small
share of its market, which is expanding rapidly.

C Company C – which is a retailer of shoes. C’s share of its market has
slipped in the last year and it is now the third largest in its industry. This is
due to new entrants to the market, attracted by its rapid growth.

D Company D – which operates a chain of restaurants. It is in a very mature
market and is currently the market leader.

E Company E – which operates a chain of department stores. As with its
rivals, E has seen strong growth in its sales in the last few years, though E
now dominates the market.

7.4 JEF is a small company which has very recently opened two restaurants under
the ‘Smiling Eater’ brand name. Both restaurants have made high sales
amongst locals and JEF’s owner, K, wishes to expand the chain quickly, but
lacks the cash to do so. He aims to open fifteen new stores within the next ten
weeks.

K as previously worked for a multinational fast food restaurant chain as a
franchise manager and has decided that this will be the most appropriate
method for JEF to use to grow its business. Before proceeding however, K has
decided to analyse this idea to see if it should be adopted.

Which of the following statements regarding the proposal to franchise
‘Smiling Eater’ is correct?

A It should be accepted as it is suitable, feasible and acceptable

B It should not be accepted as is it suitable and acceptable, but not feasible

C It should not be accepted as it is feasible and acceptable, but not suitable

D It should not be accepted as it is acceptable, but not feasible or suitable

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