Academic journal article Journal of Positive Management

Using the Idea of the Boston Consulting Group Matrix in Managing a University

Academic journal article Journal of Positive Management

Using the Idea of the Boston Consulting Group Matrix in Managing a University

Article excerpt

1.Introduction

Demographic transformations as well as growing competition on the market of educational services result in the fact that universities presently face a situation in which it seems necessary to improve the method of their previous functioning. It seems significant to use new management methods as a result of which it would be possible to improve the functioning of universities on the market. "It is necessary to change the management of education and bring it closer to professional management based on rational planning, methods and techniques of strategic management as well as educating personnel" (Projekt: Ministerstwo, 2004). The majority of universities in Poland does not use the professional approach to management and it seems that each suggestion improving a university's situation in this aspect may be important and useful (Ryñca, 2014). It also seems significant to take into account aspects related to social responsibility in the university's 70 * management process. The model based on the idea of the BCG matrix suggested by the author may be a helpful tool in the hands of managers. It makes it possible to eliminate problems emerging at universities, indicate areas in which rationalizing actions should be undertaken.

2.Boston Consulting Group (BCG) matrix - basic information

The Boston Consulting Group (BCG) matrix is used for portfolio analyses. This method is used to identify the company's strategic position indicating, at the same time, its possibilities of development. The idea of the BCG method consists in such planning of the production portfolio or the service portfolio so that it is possible to maintain a balanced relation between products/services in the long term characterized by high competitiveness and profitability as well as new products/services often being in the stage of development which are not characterized by high competitiveness and profitability (Jurek-Stepiefi, 2007). The BCG matrix makes it possible to determine which products should be withdrawn from stock and which should bring a higher profit in the future (Figure 1).

As is shown in Figure 1, the BCG matrix is based on two variables - relative share in the market and market growth. The relative share in the market makes it possible to assess the degree of a company's competitiveness. The second dimension applies to the attractiveness of the market in which a company functions (Jurek-Stepiefi, 2007).

In order to effectively manage a company, its management should consciously shape the company's diversification degree so as to shape flows in order to achieve competitive advantage. This requires organization the production portfolio in a sustainable manner, namely having products/services with a diverse competitive position as well as a diverse market growth rate. Products and/or services within the area of high market growth usually require high investment expenditures. Thus, they should be financed from the surplus generated by units positioned in fields with a low growth rate which usually do not require high investment expenditures. It thus seems necessary to balance the production portfolio in such a manner so as to achieve competitive advantage over competitors by greater possibilities of financing and development for these units which may decide the company's position as compared to its competitors in the future (Jurek-Stepieñ, 2007).

As it was mentioned previously, the BCG matrix consists of two dimensions. The market's attractiveness is measured with the use of the market growth rate which is measured from the perspective of several years. In brief, the higher the market growth rate, the more attractive the market for investors, indicating large opportunities for the company's development and acquiring new customers (Jurek-Stepieñ, 2007).

At the turn of the 1960s and the 1970s, when the BCG method was presented for the first time, the border point between high and low market growth pace was determined at the level of 10%. …

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