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Question:

Describe product management using boston matrix tool with product life cycle management, boston matrix tool and its implications to the AES marketing strategy and product life cycle management and implications to the current product?
 
 

Answer:

Product Management Using Boston Matrix Tool with Product Life Cycle Management

Preface:    Abuja Energy Surveillance (AES) Ltd has developed a new oil and gas pipeline monitoring system with the usage of drones and GIS. The surveillance unit obviously will work on to enhance the security of oil and gas pipe lines by monitoring continuously and to curb any type of theft practice that may happen with the system at any time. Apart from the theft prevention, the system is also capable of identification of any sort of oil spillage in the pipe line network. Now the AES is concerned to make the system dominant in the market of the energy security and environment pollution management sector of the oil and gas industry sector in all the oil and gas industries of the Globe. This is backdrop of the situation and as the company’s envision is to identify the strategic implications of the Boston Matrix model to the company and understand its implications to the 10 year strategic market share plan.

Boston Matrix tool and its implications to the AES marketing strategy:

Boston matrix tool do have significant potential to contribute to the AES marketing strategy. This is a strategic tool and do have complete capabilities to apply for the present case of the AES vision to dominate the market share in the countries with the oil and gas companies. Oil and gas theft and spillage is great menace in oil and gas producing countries. The key obstacle in controlling this menace is the lack of technology as well as lack of a comprehensive and well-designed integrated system which can monitor continuously the oil and gas pipelines and can alert in right time for any necessary actions. Oil theft and spillages do have great potential to affect the economy and the share of a company.  Oil spills can even work to totally demolish the economy of a country, an example of the same is the oil spill in Kuwait in 1991s, around 240 million gallons of the oil is spilled during the Iraqis retreat and to slow down the onslaught of American forces during the war. In 1979, the oil spill in the Bay of Campeche, Mexico resulted in a more than 140 million gallons of oil spillage and subsequent huge loss to the economy and the environment. In Fergana valley in 1992 about 87.7 million gallons of the oil spillage resulted in the huge loss to the environment and the economy of all the stake holders involved. These are only few major spillages and a number of spillages go unnoticed every day in every country [4][7][10]. An effective monitoring system will definitely contribute to the energy security and the environmental protection. AES surveillance system is the right launch of the system in the right time. Boston matrix tool can be used to evaluate the current market share position of the AES in all the target countries. A detailed estimation of the capabilities of the company and an introspection of the possible opportunities to strengthen the market capabilities of the company will contribute to the long term sustenance of the company in the region as well to lead the market. Boston matrix tool is a simple and versatile tool to evaluate the relative market position in an environment of opportunities and will provide a frame work for strategic improvement of the market position in the considered 10 years of the time frame.

 

Possible observations using Boston matrix tool:

Boston matrix tool can help to identify the market shares of the company in several of the countries considered. Like identification of the cash cows, stars, dogs and question marks is the basic information that can be from the analysis. Boston matrix tool can help AES to identify within its portfolio the list of the products with high market share and high growth rates as well as the list of the products with low growth rates, a typical consolidation of the relating the high growth rate products requiring cash inflows with the low growth rate products with excess cash outflows will strategically help the company to strengthen its economic position in that region. A critical evaluation of the entire product portfolio of AES will help it to channel its new investment in the possibly high growth sector of Surveillance systems.

Summarizing the observation it can be stated that the Boston matrix tool can provide an outlook for identification of the stars whose high share and high growth is assured in the future, cash cows that supply funds for that future growth, question marks that needs to be converted into the stars with the possible addition of the funds. High quality analysis output can be obtained with a possible meticulous infeed of the large and precise data to the analysis.

Analysis and Description of Boston Matrix tool Application to surveillance system of AES:

Assuming AES has few products making profit in the market, the following analysis will work on to generate classifications of the products in the portfolio in the following order,

Surveillance systems are of high marketability potential and hence they fall in the category of the markets with high market growth, however since the product is new and yet to be launched in, the product obviously fall in the low market share category. Hence it is  a question mark. Hence the cash inflows required for the product to capture the market can be captured from the cow mark type of the products with excess cash outflows. If the product did not receive the cash flow it is more likely to fall in the dogs category. Also other products in the portfolio with star mark with excess market growth and excess market share also requires the cash flows and hence a meticulous division of the funds is required between those products along with the surveillance system any if choice raised to make[5][8].

Normally speaking the market growth for oil and gas companies is limited. The oil exploration exists only in the established resources and reserves and there won’t be oil exploration in the regions where there is no oil resource. Hence it is much likely in due course the surveillance system fall into the category of the low market growth and high market share category. Since the product is much advanced and technology is quite upto the requirements it is much likely to capture high market share. So the product is much likely to become cash cow in short time. Hence the investment in this new product is strategically correct and a time span of 10 years is quite good for the complete investment recovery and to make good profits.

Other concerns: Considering the start products of AES and identification of the products with the declining market share will help in diverting the investment from some of the products to the cash cow, the Surveillance system. Similarly identification of the dogs in the product folio and elimination of the same from the occasional investments will divert those fundings to the cash cow product will further works to make AES the market leader and economically a lead player.

Product life cycle management and implications to the current product:

Marketing: Marketing is one of the key elements that decide the success of the AES’s new product launch. Even though it is quite possible that the new product can be successful, it is more important to focus on the factors like reducing the time for the marketing the product, improving the quality of the product with time, continuously required to monitor the opportunities in the new emerging markets and to capture the same. All the modes of the product campaigning viz., advertising, directly meeting the potential customers, advertising the environmental factors etc in the mass media will contribute to the marketability of the product [3][11].

Financial concerns:  The product financial concerns like heavy investment needed for the drones and the other GIS systems in the product launch in the initial periods of the product launch should be well planned. However the finance requirements in the later periods of the product manufacturing and the marketing is more likely to get from the sources identified from the Boston matrix tool analysis. The product is much likely to become the cash cow [2].

Manufacturing: Two major concerns of the manufacturing will be the product characteristics to be considered for the manufacturing and the location of the manufacturing sites. The quality of the product will not be compromised and all the ISO 9001:2000 and other QMS standards in force will be applied to the product manufacturing and secondly, the plant locations are to be well designed to meet the requirements of the quick client reach, lower transportation costs and for other issues of ease in manufacturing.

SCM: It is advisable for the company to adopt the SCM –software or other ERP systems which will synchronize the total life cycle of the product from quote, manufacturing, supply and the market reach. Keeping in view of the cross border marketing requirements and the supply chain management of the product a recent version of the SCM software package implementation for the company will serve the smooth launch and marketing of the product. It is also required to take precautionary measures to face the oil and gas thefts in the supply chain for the region selected and its effect on the new product marketing[1][6][9].

Human resources:  Well trained, qualified and skilled manpower is needed at different levels of the company verticals and the horizontal organization structural needs[12].

Conclusion:

Considering the target market and the characteristics of the new product planned for the release by AES, it is very clear that the product will be absorbed with flying colors into the market. The analysis of the recommendations of the Boston Matrix tool for the product release into the market are very optimistic. Since the product has all the requirements of becoming a cash cow, the company is assured of the profits and the possible dominance through the market share. What actually required is a synchronization of the resources and the management practices for best outcome.  An effective management of the same do assure the company to become strategic market leader and sustain the same for the coming 10 years.

 

References:

1. AKPOMUVIE, O. (2011). Tragedy of commons: Analysis of oil spillage, gas flaring and sustainable development of the Niger Delta of Nigeria.Journal of Sustainable Development, 4(2), p200.

2. Billington, C., Lee, H. L., & Tang, C. (2012). Successful strategies for product rollovers.Sloan Management Review, 39(3).

3. Czinkota, M., & Ronkainen, I. (2012).International marketing. Cengage Learning.

4. Dale, C., Osegowitsch, T., & Collinson, S. (2014). Disintegration and De-Internationalization: Changing Vertical and International Scope and the Case of the Oil and Gas Industry.Orchestration of the Global Network Organization (Advances in International Management, Volume 27) Emerald Group Publishing Limited, 27, 487-516.

5. Halachmi, A. (2011).The University Business in Transition: Of Stars, Cash Cows and Dogs (pp. 39-51). VS Verlag für Sozialwissenschaften.

6. Hamilton, D. I. (2012). Oil and Gas Companies and Community Crises in the Niger Delta.American Review of Political Economy, 3.

7. Kadafa, A. A. (2012). Oil exploration and spillage in the Niger Delta of Nigeria.Civil and Environmental Research,2(3), 38-51.

8. Konečný, Z., & Zinecker, M. (2015). Using the Boston Matrix at Identification of the Corporate Life Cycle Stage.Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 63(1), 235-243.

9. Musa, A., Yusuf, Y., McArdle, L., & Banjoko, G. (2013). Corporate social responsibility in Nigeria’s oil and gas industry: the perspective of the industry. International Journal of Process Management and Benchmarking,3(2), 101-135.

10. Neff, J. M., Rabelais, N. N., & Boesch, D. F. (1987). Offshore oil and gas development activities potentially causing long-term environmental effects.Long-term environmental effects of offshore oil and gas development. London (UK): Elsevier. p, 149-173.

11. Proctor, T. (2014).Strategic marketing: an introduction. Routledge.

12. Snell, S., Morris, S., & Bohlander, G. (2015).Managing human resources. Cengage Learning.
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