Fashion Retail in the UK Essay Example | Topics and Well Written Essays - 1000 words

Fashion Retail in the UK - Essay Example The paper "Fashion Retail in the UK"discovers the the ideas behind the BCG business strategy in the context of UK fashion retail. The BCG strategy suggests that the resources of an organization be allocated depending on its relative position on the grid. The grid has four sections/ positions. These are cash cow, star, question mark, and dog. The BCG strategy is diagrammatically represented as follows. The relative market share is a dimension that is utilized in evaluating a business portfolio. A corporate that enjoys high market share would ultimately get a high return of cash. This can be explained in terms of economies of scales. A firm that manufactures large quantities of goods has benefits of economies of scale and thus they enjoy higher profits. On the other hand, the market growth rate is a representation that earnings and profits increase. An increase in the growth rate means that large amounts of cash would be utilized to stimulate further growth. This means that an organiza tion in the rapidly growing industries use up a lot of cash and one should only invest in such organizations when there is an underlying growth or a sustained market share. Dogs: the brand in this quadrant is in a slow growing market. Furthermore, such brands are not the market leaders: they hold a low market share. Such brands generate nil or sometimes negative cash on returns. It is not wise for one to invest in such brands unless one opts for a long-term investment. As such, one may opt for retrenchment.