The Specialist Clothing Company (SCC) is a manufacturer of a wide range of clothing. Its operations are organised into five divisions which are as follows:
i) Fashion
(ii) Industrial
(iii) Leisure
(iv) Children
(v) Footwear
The Fashion division manufactures a narrow range of high quality clothing which is sold to a leading retail store which has branches in every major city in its country of operation. The products have very short life cycles.
The Industrial division manufactures a wide range of clothing which has been designed for use in industrial environments. In an attempt to increase sales volumes, SCC introduced the sale of these products via mail order with effect from 1 June 20X5.
The Leisure division manufactures a narrow range of clothing designed for outdoor pursuits such as mountaineering and sky diving, which it markets under its own, well-established 'Elite' brand label.
The Children division manufactures a range of school and casual wear which is sold to leading retail stores.
The Footwear division manufactures a narrow range of footwear.
The management accountant of SCC has gathered the following actual and forecast information relating to the five divisions.
|
Year ending 31 May
|
20X4
|
20X5
|
20X6
|
20X7
|
20X8
|
|
|
Actual
|
Actual
|
Actual
|
Forecast
|
Forecast
|
|
Fashion
|
|
|
|
|
|
|
Market size ($m)
|
200·00
|
240·00
|
280·00
|
305·00
|
350·00
|
|
Revenue ($m)
|
10·00
|
14·40
|
22·40
|
30·50
|
35·00
|
|
Industrial
|
|
|
|
|
|
|
Market size ($m)
|
150·00
|
158·00
|
166·00
|
174·00
|
182·00
|
|
Revenue ($m)
|
5·00
|
5·10
|
5·20
|
5·30
|
5·40
|
|
Leisure
|
|
|
|
|
|
|
Market size ($m)
|
20·0
|
20·50
|
21·00
|
21·50
|
21·80
|
|
Revenue ($m)
|
13·60
|
14·20
|
14·70
|
15·00
|
15·20
|
|
Children
|
|
|
|
|
|
|
Market size ($m)
|
60·00
|
70·00
|
80·00
|
90·00
|
100·00
|
|
Revenue ($m)
|
2·00
|
2·10
|
2·20
|
2·30
|
2·40
|
|
Footwear
|
|
|
|
|
|
|
Market size ($m)
|
20·00
|
20·20
|
20·40
|
20·60
|
21·00
|
|
Revenue ($m)
|
0·50
|
0·52
|
0·54
|
0·52
|
0·50
|
The management accountant has also collated the following information relating to the market share held at 31 May 20X6 by the market leader or nearest competitor in the markets in which each division operates:
|
Division
|
(%) Market share held by market
leader/nearest competitor
|
|
Fashion
|
8
|
|
Industrial
|
15
|
|
Leisure
|
70
|
|
Children
|
28
|
|
Footwear
|
33
|
Required
a) Use the Boston Consulting Group matrix in order to assess the competitive position of SCC.
b) Advise the management of SCC of THREE strategies that should be considered in order to improve the future performance of SCC.
c) Discuss TWO limitations of the Boston Consulting Group matrix as a strategic planning tool.