Scribd
Upload
38 views

BCG (Boston Consulting Group) Matrix

The BCG Matrix was developed by Bruce Henderson of Boston Consulting Group in the early 1970s to classify products or business units based on their relative market share and market growth rate. It categorizes products as Stars, Cash Cows, Question Marks or Dogs. Stars are high share in a high growth market, Cash Cows are high share in a low growth market, Question Marks are low share in a high growth market, and Dogs are low share in a low growth market. The matrix is used to assess the cash flow and investment needs of different products and help with resource allocation and divestment decisions.

Uploaded by

SANSKAR TIWARI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
38 views

BCG (Boston Consulting Group) Matrix

The BCG Matrix was developed by Bruce Henderson of Boston Consulting Group in the early 1970s to classify products or business units based on their relative market share and market growth rate. It categorizes products as Stars, Cash Cows, Question Marks or Dogs. Stars are high share in a high growth market, Cash Cows are high share in a low growth market, Question Marks are low share in a high growth market, and Dogs are low share in a low growth market. The matrix is used to assess the cash flow and investment needs of different products and help with resource allocation and divestment decisions.

Uploaded by

SANSKAR TIWARI
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
You are on page 1/ 9

BCG (Boston Consulting

Group) Matrix
This Matrix was developed by Bruce Henderson of the Boston
Consulting Group in the early 1970.
Acoording to this matrix any product is classified as high or low
performance depending upon their market growth rate and relative
market share.
Relative Market Share (RMS)
• The higher your market share, the higher proportion of market you
control.
Market Growth Rate
• Market growth is used as a measure of a market’s attractiveness.

MGR= Individual sales this year- Individual sales last year


Individual sales last year
The BCG Growth-Share Matrix
Question Mark/Problem Children
• Most business start of as a question mark
• Investment needs to be higher
• They absorb great amount of cash if market share remains
unchanged(low)

Stars
• Stars are leaders in business
• They require large investment to maintain it’s large market share
• It leads to large amount of cash consumption and cash generation
Cash Cows
• Foundation of the company, stars of yesterday
• They generate the highest cash
• Profits are extracted by investing as little cash as possible
• They are located in a matured industry

• Dogs
• Dogs do not have the potential to bring in cash and are the cash traps
• High cost-Low quality
• Business is situated in a declining stage
Why BCG Matrix
To asses
• Profile of product/business
• Cash demands of product
• The development cycle of product
• Resource allocation and divestment decisions

https://www.youtube.com/watch?v=gNR49lk5dS0
Main Steps of BCG Matrix
• Identifying and dividing a company into SBU(Strategic Business Unit)
• Assesing and comparing the prospects of each SBU according to two
criteria
1- SBU’s relative market share
2- Growth rate of SBU industry
• Classifying the SBU’s on the basis of BCG matrix
• Developing strategic objective for each SBU

You might also like