The company CAU, specialized in turning, is located in the Arve Valley in Haute

Savoie and is facing difficulties in these times of financial crisis and highly
competitive global market. It has been suffering from a lack of investment for
several years due to insufficient financial resources. It remains a secondary
player in the turning market, known for the quality of its innovations and the
productivity of its workforce. Faced with liquidity problems, the company has
attempted to reduce all its costs, but the sources of economies of scale are
becoming limited due to the production capacities of the current equipment, which
has not been renewed for years.

To remain competitive against the competition, the company has lowered its prices,
especially in the automotive and household sectors. However, the director
emphasizes that the challenge for the company is to better understand its
environment from a strategic perspective while valuing its know-how, which is
currently underutilized due to the lack of investments allowing an upgrade. The
various strategic business areas in which the company has developed are not equally
important in terms of results and possible development paths.

At an extraordinary meeting at the end of 2010, the management controller and his
team proposed a study of the organization to address the following questions:

What are the strategic business areas on which CAU should focus?
How to plan strategic actions?
The director is well aware of the need to better control the company's activity and
the resulting performance. Therefore, he is particularly interested in an analysis
of the company's strategic business areas (SBUs) from a Boston Consulting Group
(BCG) perspective.

Intense Competition: CAU operates in a highly competitive global market,

particularly in sectors like automotive and household goods. Lowering prices to
remain competitive has put pressure on profit margins, further exacerbating
financial challenges.
Financial Constraints: The company has been experiencing financial constraints for
years, leading to a lack of investment in modernizing equipment and processes. This
has hindered its ability to improve productivity and innovate, making it difficult
to keep up with competitors.
Limited Production Capacity: Due to the lack of investment in equipment renewal,
CAU's production capacities are constrained. This limits the potential for
economies of scale and efficiency gains, making it challenging to reduce costs and
improve profitability.
Liquidity Problems: CAU is facing liquidity problems, which can impact its ability
to meet short-term financial obligations and invest in necessary upgrades and
improvements.
These problems combined poses significant challenges for CAU's sustainability and
growth. Addressing these issues will require an analysis of DAS of this company in
a point on view of BCG
The BCG matrix is a strategic analysis tool developed by the Boston Consulting
Group in the late 1960s. Still widely used in corporate strategy, this matrix
allows companies to represent their portfolio of activities based on the growth
rate of the targeted market and the company's relative market share.
is where a company has high market share in a slow-growing industry. These units
typically generate cash in excess of the amount of cash needed to maintain the
business.
are units with low market share in a mature, slow-growing industry. These units
typically "break even", generating barely enough cash to maintain the business's
market share.
are businesses operating with a low market share in a high-growth market. They are
a starting point for most businesses. Question marks have a potential to gain
market share and become stars, and eventually cash cows when market growth slows.

are units with a high market share in a fast-growing industry. They are graduated
question marks with a market- or niche-leading trajectory
Stars require high funding to fight competitors and maintain their growth rate.
When industry growth slows, if they remain a niche leader or are amongst the market
leaders, stars become cash cows; otherwise, they become dogs due to low relative
market share.
Market Share Limitation: Market share is just one factor influencing competitive
strength, and its significance varies across industries. In some cases, market
share may not accurately reflect a company's competitive advantage or potential for
growth.

Simplistic Model: The BCG matrix oversimplifies complex business situations by

categorizing products or business units into only four quadrants based on two
dimensions. This can lead to overlooking important nuances and complexities within
the company's portfolio.