Business Unit Report

The following report $($table $1)$ summarizes the company's market position relative to its

three major competitors in the various businesses in which Amalgamated Products,

Inc. $($AMPI$)$ operates. It also shows the sales and profitability data along with an

evaluation of the growth potential of each industry.

AMPI divides their businesses into two markets: the professional and home market,

and the industrial market. They have six business units $($a brief description of each

unit follows$).$

In the home and professional market, the office equipment division manufactures a

high$-$quality line of office furniture. The products are distributed through better office

equipment stores and interior design firms in Chicago serving the upper Midwest.

The diagnostic equipment division specializes in developing and marketing medical

equipment, specifically equipment used in blood analysis. This division has enjoys a

reputation for the precision and accuracy of its equipment.

The audio speakers division offers high end speakers for the in$-$home theater market

and is known for the innovativeness of their designs.

In the industrial market, the personal products division consists primarily of toiletry

products for the individual consumer. The products include shampoos, conditioners,

bath soaps, and mouthwash. All of the products are sold under generic brand labels.

The flavorings division provides artificial flavors and aromas to a number of food

manufacturers $($Sara Lee, Nabisco, etc.$).$

AMPI is a pioneer in high$-$performance amplifier components with a $58\%$ market share.

This market promises the highest growth potential in the future as more and more

consumers are demanding high quality for their car stereos. Because of their strong

reputation for amplifiers, they were able to establish a good position in high$-$

performance radios for cars even though they are now losing ground to two foreign

competitors.

Your task:

Create a modified BCG matrix $-$ that is you can consider factors other than

industry growth and relative market share. Use industry attractiveness as your

vertical axis and competitive strength as your horizontal axis. Be sure to label

axes and quadrants and circles. You can do this by hand and upload a picture, for

this part.

Which factors are you considering for industry attractiveness; which for competitive

strength? What was your reasoning behind the positioning of each business unit's

circle?

Make recommendations based upon your analysis. What should AMPI do with

each of these divisions?

Note: if you just calculate the regular BCG$,$ you will receive no credit for this exercise.TABLE $1$ AMP, Inc.$-$ Competitiveness of business units and growth rate of industry

How to read information in Table $1$: For example, office furniture. This division generates $5\mathrm{.}1$ million

in sales for AMPI. It has a return on sales of $2\%.$ Its current sales growth is projected to be in the area

of $1-2\%.$ The growth rate of the industry is estimated to average $3-4\%$ per year for the next five years

and the industry average rate of return is $5\%.$ Office furniture has $16\%$ of its market. It is the second

largest competitor in that market $-$ the leader has $20\%$ and the firm in third place has $15\%.$

A note on process

I am not looking for perfect artistic renditions $-$ just approximations. The value in this exercise comes

from the relative positioning of the six business units $-$ not the absolute positioning.