Stars Products in this category are those that are most profitable and encompass a large share of the market Therefore it is advisable to invest in these products Notably however even though these products generate a lot of profit because they are so in demand they also cost the company a ID: 912361
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Slide1
The BCG Matrix is a tool used by organizations to assess the value of the products that they offer in terms of their growth (i.e., how desirable the product on the market will be) and market share (i.e., competitive advantage). Using the model, an organization can determine which products are a worthwhile investment of company money and employee time and effort.Stars: Products in this category are those that are most profitable and encompass a large share of the market. Therefore, it is advisable to invest in these products. Notably, however, even though these products generate a lot of profit, because they are so in demand, they also cost the company a large sum of money to produce. Ultimately, for these products, equal amounts of money go in and out of the organization. To prevent star products from becoming cash cows, continue to invest in these products until their growth rate begins to decline.Question Marks: These products have the potential to increase their occupancy of the market but currently hold a small portion. This means that they do not bring in much profit for the organization. However, because they have the potential to become star products, they require investment from the organization.Cash Cows: Products that dominate the market and accrue significant profit are considered cash cows. However, the money generated from these products is used to transform question mark products into market leaders. Therefore, organizations are advised to continue to invest in these products just enough to maintain their current level of production in order to “milk” the benefits provided.Dogs: Finally, dogs are products that neither dominate the market nor have potential to do so. These products don’t cost much to produce but are not very profitable. It is in the organization’s best interest to disinvest in these products because putting money into these products without any significant return is a misuse of company funds.
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BCG Matrix Template
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Question Marks
Stars
Dogs
Cash Cows
Market Growth Rate
Relative Market Share
The most profitable products and services that encompass a large share of the market.
Have the potential to increase their occupancy of the market but currently hold a small portion
Products that dominate the market and accrue significant profit
products that neither dominate the market nor have potential to do so