Question C2

Sunshine group has diversified businesses. Tom, the new Chairman of the Sunshine group would like to review the current practice and establish priorities for resources allocation within the group.

Pear Store, a business under the Sunshine group, is a traditional cell phone manufacturer for developing countries in Asia. Pear would like to expand the company through different growth strategies. Pear would like to develop a new cell phone model with high-resolution camera for the new market in India. Besides, it would like to design and create the lens of the cell phone instead of buying from other suppliers to maintain a stable cost. Also, it plans to open ten retail shops in India for selling products to the customers directly instead of solely relying on local distributors. Finally, Pear considers another strategy of merging with a SIM card provider in India to achieve a strong customer network.

Lucky Tour, a second business under the Sunshine Group, operates tours in Asian countries. Due to COVID-19 pandemic, almost all international travels stopped and such difficult time has lasted for more than a year, with deficit for five consecutive quarters. Apart from the abovementioned, the prospect of such travel agency business is gloomy since people could easily access to all kinds of information online causing declining demand in group tour to developed countries nearby.

1. (a)Name and clarify with case information which category in the BCG Matrix does Lucky Tour belong to. Provide your specific recommendation to Tom. (3 marks)
2. (b)It is known that strategy is a concept in management. Name and explain theFOURgrowth strategies mentioned in the above case. (12 marks)