Two large multispecialty medical groups have recently asked you to conduct audits using the BCG matrix. For the first group, your analysis reveals the following distribution of services:
- Cash cows—65 percent;
- Stars—10 percent;
- Problem children—20 percent;
- Dogs—5 percent.
In the second group, the distribution is:
- Cash cows—20 percent;
- Stars—60 percent;
- Problem children—15 percent;
- Dogs—5 percent.
Provide your analysis to each group and how you reached your analysis.
2 references
500 word count
No references older than 5 years old
APA format
Expert Solution Preview
Introduction:
The BCG matrix is a tool used to evaluate a company’s product portfolio and market share. It analyzes the distribution of services in terms of four categories: cash cows, stars, problem children, and dogs. In this assignment, we will discuss the analysis of two medical groups using the BCG matrix.
Analysis of the First Group:
The first medical group has a distribution of services as follows: cash cows represent 65 percent, stars represent 10 percent, problem children represent 20 percent, and dogs represent 5 percent. The cash cows are the largest portion of their services and generate the most revenue. The stars have a high growth rate and market share, but require a lot of investment. The problem children are services with potential but need further development and investment. The dogs have a low market share and growth rate and may not generate a profit.
Based on these percentages, it appears that the first medical group has a well-established and stable product portfolio, but it is not very innovative or diverse. They can consider investing in their problem children to increase their market share and revenue. They may also want to consider discontinuing the dogs as they do not generate much profit.
Analysis of the Second Group:
The second medical group has a distribution of services as follows: cash cows represent 20 percent, stars represent 60 percent, problem children represent 15 percent, and dogs represent 5 percent. The stars are the largest portion of their services and have a high market share and growth rate. The cash cows are well-established and generate revenue, but have a limited growth rate. The problem children have potential but require investment and development, and the dogs have low market share and growth rate.
This analysis suggests that the second medical group has a very innovative and diverse product portfolio, with the potential for high growth and profitability. However, they may need to invest more in their problem children to further develop their potential. They may also want to consider divesting some of their cash cows to fund their stars and problem children.
Conclusion:
Using the BCG matrix, we can analyze the distribution of services in two medical groups. The first group has a stable but not very innovative or diverse product portfolio, while the second group has a diverse and innovative portfolio with high potential for growth and profitability. Both groups can benefit from investing in their problem children, while the first group may want to divest their dogs and the second group may consider divesting some of their cash cows.
