- 10 Marks
Question
The products and services (i.e. SBUs) are classified below using the Ashridge Portfolio Display Matrix:
- Gasoline (Petrol) and Gas Oil (Diesel) – These products are ballast products using the Ashridge Portfolio Display Matrix. A ballast business according to the matrix is a product that has high feel because it operates in the same industry as the head office/parent company but has low benefit because opportunities for the head office/parent to add value are low since the product is already successful. It is said that the two products are operating in the main industry of BOGML.
Answer
The Ashridge Portfolio Display Matrix classifies business units or products based on their alignment with the parent company’s industry and the potential for the head office to add value.
Classification of BOGML’s Products and Services using the Ashridge Portfolio Display Matrix:
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Gasoline (Petrol) and Gas Oil (Diesel) – These products are classified as Ballast Businesses under the Ashridge Portfolio Display Matrix. A Ballast Business has a high feel because it operates in the same industry as the parent company but has a low benefit since there is limited opportunity for the parent company to add further value.
- The rationale behind this classification is that these two products operate optimally in terms of financial and operational efficiency, leaving little room for further improvement by the parent company.
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LPG and Kerosene – These products are classified as Heartland Businesses in the Matrix.
- They have a high feel because they belong to the same industry as the parent company, and a high benefit because the parent company has the potential to enhance the value of the product.
- The classification is justified by the fact that the LPG and Kerosene business lacks the necessary competencies for success, while the parent company possesses relevant skills to improve the product offering.
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Mini-marts and Washing Bays – These services fall under Alien Businesses in the Ashridge Portfolio Display Matrix.
- The classification is based on their low feel, as they operate outside the core petroleum industry of BOGML, and low benefit, since they are already thriving without the intervention of the parent company.
- BOGML lacks knowledge of the key success factors for these businesses, making it difficult to add value.
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Commercial Transport Services – This service is also classified as an Alien Business because:
- It has low feel, as it operates outside the petroleum industry.
- It has low benefit, as the business is already successful and does not require any additional value addition from the parent company.
- The transport business is independently managed and does not rely on the parent company for operational improvements.
- Topic: Internal analysis
- Series: Nov 2024
- Uploader: Salamat Hamid