Approaches of BCG Matrix Components of BCG Matrix Applications of BCG Matrix Advantages of BCG Matrix Limitations of BCG Matrix The BCG Matrix High Low Relative position Market Share ID: 912363
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Slide1
BCG Matrix
Slide2Contents
Emergence of BCG Matrix
Approaches of BCG Matrix
Components of BCG Matrix
Applications of BCG Matrix
Advantages of BCG Matrix
Limitations of BCG Matrix
?
Slide3The BCG Matrix . . .
High
Low
Relative position (Market Share)
Low
High
Business growth rate
The Boston Consulting Group (BCG), founded in
1963, was a pioneering consulting. It introduced various concepts like ”experience curve” and ”growth-share matrix”
The experience curve says that the cost would come down to certain extent cumulative production is doubled. May establishments got an idea to minimize their cost and expand their capacity aggressively.
However, when inevitable market downturns occured or innovative products were introduced, the flaws of this approach became apparent
Companies found themselves with excess capacity and outdated product designs, as well
as reduced capacity for innovations given their previous focus on cost-cutting
Slide4Components of BCG Matrix
Each of the four quadrants of the grid has different implication for the SBUs that fall into the category
Stars are SBUs that compete where there is high market share and high-growth industries.
Question marks are SBUs
which have weak market shares but they compete in high-growth industries.
Cash cows are SBUs which operate in high market shares but in low-growth industries.
Dogs are SBUs
which operate in low-growth industries with weak market shares.
Stars
?
Question marks
Cash cows
Dogs
Slide5BCG Matrix application
High
Low
Relative position (Market Share)
Low
High
Business growth rate
Invest if needed to create cash cow
Select a few
Divest the others
Liquidate
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