Professional Documents
Culture Documents
A) B) C) D) : Time in
A) B) C) D) : Time in
purview of internal and micro environment arralysis in the sense unattractive,industry) to bringin cash. Question rnarks
that doing the matrix allows an internal assessment ofthe products unable to obtain a dominant market sllare (and thus
or services offered by the frrm. Knowing and having a BCG matrix become stars) by the time the industry growth rate
for the firm is basic to business managers in particular the inevitably slows become dogs. According to BCG growth
mirketing manager. The BCG matrix gives the members of the share matrix" dogs should be sold of,f or managed
business organization an idea which amongits products or services
carefully for the small amount of cash they can generate.
have a relative advantage or a certain level of competitiveness
vis-a-vis its rival firms. Doing the BCG matrix is quite simple and straightforward
as shown in Figure 64. As shown in Figure 64, a four-quadrant
A BCG matrix is a four-quadrant diagram showing
categorization of products or services handled by the firm. BCG
matrix is a basic tool for knowing which of the products or services
offered by the firm is worth pushing now (or later) and which among
themto spend much of the resources of the firm. The categorization
of products and services wili be of great help in doing the SWOT
analysis and eventually makes strategizing not so diffrcult. An
example of a BCG matrix is that of the Bank of the Philippine pushed hard or set aside for the time being-
Islands as shown in Figure 64.
In developingthe BCG matrix, it is important to do an honest- Stars Question mark
to-goodrress internal analysis before categonzing the products and
seryices then placing them in any of the four quadrants in the Deposi'ts Cash Acceptance Machine
BCG rnatrix. Guided by the track record of the products or services Internet based Services Flxpress Deposit
in terms of sales and contribution to the image ofthe firm, it should Card based Services Express Net \.
be easy to develop the BCG matrix. The matrix classifres the Corporate Finance Services Express phone call center
company's products or seryices into four categories briefly described Mobile Banking
as follows:
a). Question marks. Sometimes called "pro'blem Cash cows Dogs
children" or "wild cats," quesiion marks are new Lending 'Insurance
products with the potential for success, but they.rieed a 1\[ortgage
Leasing
lot of cash f,or development. If such a product is to gain
TYatle anC Cash Management
enough market share to become a market leader and
thus a star, money must be taken frona more mature Investment Banking
products and spent on question marks.
b) Stars. The products/services inthis cabegory are market Figure 64. BCG Matrix of the Bank of the Philippine lslands
leaders typically at'the peak of their prodrrct life cycle. (source: Navanos a Q1AQ)
They are usually capable of generating enough cash to
maintain their high share of the market. When their 8.12 Gompany ComPetitive lndex
market rate slows, stars become cash cows.
c) Cash cows. They include products or services that
typically bring in far more money than is needed to
maintain their market share. In the declining stage of
ttreir life cycle, these products are "milked" for cash thai
will be invested in new question marks.
d) Dogs. This category of products has low market share co4pany competitive index addresses the individual
competitivur"tt of each of the players within the industry. By doing
and does not have the potential (because they are in an
L64 FUNDAMENTALS OF STRATEGIC MANAGEMENT
TASK 1: ENVIRONIvIENTAL SCANNING 165