BCG MATRIX Presented By:

Palash Badal & Rahul Gupta

2013BCAF004 2013BCAF005
BCG MATRIX

INTRODUCTION
 The Boston consulting Group’s Growth share
Matrix (BCG Matrix)
 It involves strategic
business units (SBUs)
being positioned in the
matrix on the basis of QUESTION
market growth rate and STAR
MARK
their market share,
relative to that of the
largest competitor.
 Market growth rate
provides an indicator of
COW DOG
the relative
attractiveness of the
market served by each
of the business in the
company’s profile.
 CLASSIFICATION

STARS DOGS
(high growth, high market share) (low growth, low market share)

CASH COWS QUESTION MARKS

(low growth, high market share) (high growth, low market)
 CLASSIFICATION
STARS (high growth, high market share)
 Stars are using large amounts of cash.
 Stars are leaders in the business.
 Stars are frequently roughly in balance on net cash flow.

CASH COWS (low growth, high market share)

 Profits and cash generation should be high.
 Because of the low growth, investments which are needed
should be low.
 Cash Cows are often the stars of yesterday and they are
the foundation of a company.
CLASSIFICATION 1
 DOGS (low growth, low market share)
 Avoid and minimize the number of Dogs in a company.
 Watch out for expensive ‘rescue plans’.
 Dogs must deliver cash, otherwise they must be liquidated.

 QUESTION MARKS (high growth, low market share)

 They have the worst cash characteristics of all, because they have
high cash demands and generate low returns.
 If the market share remain unchanged, it will absorb great amounts
of cash.
 Either invests heavily, or sells off, or invests nothing and generates
any cash that one can.
 Benefits of the BCG-Matrix
 The BCG-Matrix is helpful for managers to evaluate balance in
the company’s current portfolio of Stars, Cash Cows, Question
Marks and Dogs.
 BCG-Matrix is applicable to large companies that seek volume
and experience effects.
 The model is simple and easy to understand.
 It provides a base for management to decide and prepare for
future actions.
 If a company is able to use the experience curve to its
advantage, it should be able to manufacture and sell new
products at a price that is low enough to get early market share
leadership. Once it becomes a star, it is destined to be
profitable.
 2Limitations of BCG-Matrix
 How to define market and how to get data about market
share.
 A high market share does not necessarily lead to
profitability at all times.
 The model employs only two dimensions – market share
and product or service growth rate.
 Low share or niche businesses can be profitable too (some
Dogs can be more profitable than cash Cows).
 The model does not reflect growth rates of the overall
market.
 The model neglects the effects of synergy between
business units.
LIFE’S GOOD
 3INTRODUCTION
 The company was originally established in 1958 as Gold
Star, producing radios, TVs, refrigerators, washing
machines, and air conditioners.
 The LG Group was a merger of two Korean companies,
Lucky and Gold Star, from which the abbreviation of LG
was derived.
 The current "Life's good" slogan is an acronym.
 Before the corporate Name change to LG, household
products were sold under the Brand name of Lucky, while
electronic products were sold under the brand name of
Gold Star.
 LG GROUP
1. LG. Philips LCD
2. LG Chemical
3. LG Telecom
4. LG Powercom
5. LG Twins
6. LG Dacom
 Business areas and main products
Mobile communications Digital appliance
 CDMA Handsets  Air Conditioners
 GSM Handsets  Refrigerators
 3G Handsets  Microwave Ovens
 Washing Machines
 Cellular Phones
 Vacuum Cleaners
 Home Net
 Compressors for Air
Conditioners and
Refrigerators
 Business areas and main products
Digital display Digital media
 Plasma TVs  Home Theater Systems
 DVD Recorders
 LCD TVs
 Super Multi DVD Rewriters
 Micro Display Panel TVs
 CD
 Monitors  Notebook PCs
 PDP Modules  Desktop PCs
 OLED Panels  PDAs
 USB Memory  PDA Phones
 MP3 Players
 Flat Panel Computer
 New Karaoke Systems
Monitors
 Product of LG
Business Areas Products
Consumer Electronics LCD TV, Plasma Display, Display
Panel, Color Television, Home Theatre
System, Music system, DVD
Recorder/Player, MP3 & MP4 Player
Home Appliances Conditioner, Commercial Air
Conditioner, Refrigerator, Washing
Machine, Dishwasher, Microwave,
Vacuum Cleaner
Computer Products Laptop, Personal Computer, LCD
monitor, CRT monitor, Optical Storage
Devices
Mobile Phones Premium trend setter phone , Camera
Phone , Music Phone ,Color Screen
GSM Handset
REVENUE/PROFIT

Question Mark Star Cash Cow Dog

Introduction Growth Maturity Decline

TIME
 CONCLUSION
 LG CONSUMER ELECTRONICS are
at INTRODUCTION STAGE (Question Mark).

 LG HOME APPLIANCES are at STAR STAGE.

 LG COMPUTER PRODUCTS are at CASH

COW STAGE.

 LG MOBILE PHONES is at DOGS STAGE.