Reference no: EM133259250
Mackay Enterprises is a diversified company concentrating in three area: insurance and financial services (life, property/casualty, and title insurance: insurance brokerage and management services: and consumer finance), travel services (air travel and car rental) and manufacturing
Each of these three areas is in competition with a well-defined set of market rivals. Mackay Enterprising strategy is to focus on key market segments related to its three primary businesses. Two of the organisation's major corporate objectives are to achieve a significant market share in each business segment and to achieve industry leadership in terms of service, reputation, innovation, and efficiency.
Subsidiaries of Mackay Enterprises benefit from being part of a larger corporation. Funds may be borrowed at a low cost, capital may be allocated among subsidiaries, and corporate staff provides centralised strategic planning, investment, real estate management and data processing. Among Mackay Enterprise's major subsidiaries are Rational Life, Mackay Transport, Mackay Airlines and Easy Rent-A-Car.
Rational Life insurance is sold most actively in the eastern states of Australia. Rational's speciality is low-cost insurance with term-like rates. This type of insurance represents 85% of its direct ordinary volume. Rational responds to changing customer needs with new products, such as its new product offerings for two annuities that fund IRAs (individual retirement accounts) and a policy combining the features of term and whole life insurance
Mackay transport operates a transport-equipment leasing business. The equipment-including cargo containers, piggyback trailers, and over-the-road trailers-is maintained and repaired by company-owned repair shops and mobile service units. The company enjoys operating-cost advantages resulting from economies of scale.
Mackay Airlines flies to more locations around the world than other airlines. To compete, Mackay Enterprises has refurnished many aircraft, improved fuel economy and noise reduction now complement superior passenger accommodation. Mackay's airline's low cost-approach makes it a major national airline.
Easy Rent-A-Car provides the same services as many of its competitors but at lower rates. Easy has explained to provide a service at airports and supports its dealers with a nationwide, toll-free, computerised reservation network. It has an exclusive agreement with a leading department store chain to operate concessions for Easy's car rentals. All the strategies for the subsidiary are geared towards maintaining market share.
Mackay Enterprises is aware that the marketing environment is an important consideration in adapting a product to meet market needs. Consistent with its strategies to achieve significant market share and become an industry leader. Mackay Enterprises is diversifying to achieve low-cost marketing in all areas. Mackay Enterprises is currently evaluating how best to proceed with its marketing strategies.
Using the BCG matrix approach, draw, identify and explain each of Mackay Enterprises' SBUs.
Question
Considering Ansoff's Growth Matrix, which strategy would you use for Mackay Enterprises products/services and why? (Consider Market Penetration, Market Development, Incremental Innovation and/or Radical Innovation)