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How to run a multi-discipline photography business - fitting drones in - part 2 of 1 2 3

by Dave Burlison Published 01/10/2016

The BCG Matrix is based on the product lifecycle theory that can be used to determine what priorities should be given in the product portfolio of a business. To ensure long-term value creation, a company should have a portfolio of products that contain both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. It has two dimensions: market share and market growth. The basic idea behind it is that the bigger the market share a product has or the faster the product’s market grows, the better it is for the company.

Divided into four categories:

Stars (= High Growth, High Market Share)

Use large amounts of cash and are leaders in the business so they should also generate large amounts of cash.

Cash Cows (= Low Growth, High Market Share) Profits and cash generation should be high and because of the low growth, investments needed should be low. Keeps profits high and enables investment to be diverted to new products.

Dogs (= Low Growth, Low Market Share)

Avoid and minimise the number of dogs in a company and beware expensive turnaround plans.

Question Marks (=High Growth, Low Market Share)

Worst cash characteristics of all, because of high demands and low returns due to the low market share. If nothing is done to change the market share, question marks shall simply absorb great amounts of cash and later as the growth slows result in a dog! The question is to either invest heavily or sell off or invest nothing and generate whatever cash it can.

Take the last sip of tea, we are nearly there!

'So what has this all to do with photography?' I hear you say. Well it’s only a thought, but if, for instance, as mentioned previously Dave’s wife is a qualified pilot, it follows then an emerging market such as aerial photography/ video with drones is worth investigating as it appears to be taking off! Therefore it would sit neatly in the Question Mark quadrant (High Growth, Low Market Share), but with sound investment, circa £30k in a DJI Matrix 600 with A3 Pro, Inspire 1 Pro, Phantom 3 Professional, flight training/exams, Civil Aviation Authority (CAA) Permission For Aerial Work (PFAW), insurance, etc then moving to the Stars (High Growth, High Market Share) quadrant has enabled quick entry to this growing market and ultimately as the market matures then a move into the Cash Cows (=Low Growth, High Market Share) quadrant is projected.

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1st Published 01/10/2016
last update 09/12/2022 14:56:52

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