BCG MATRIX :

PRESENTED BY=
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 BCG Matrix
 Matrix is developed by Bruce Henderson for Boston Consulting Group in 1970.
 According to this technique, business or the products are classified as low or
high performers depending upon their market growth rate and relative market
shares.
 It is used to identify how corporate cash resources can be best used to
maximize future growth and profits.
 BCG Matrix Definition:- The encyclopedias put forth the BCG matrix’s
definition as a theory of business that helps business owners decide which
products to roll back and which to invest in more for the future. It is thus, in
essence, like a roadmap that helps a business identify its strong suits while
keeping an eye out for the weak links.
What are the elements of the BCG Matrix?

 STARS :

Stars operate in high growth industries and maintain high market share. Stars are
both cash generators and cash users.
 Stars are leaders in business.
 They also require heavy investment, to maintain its large market share.
 It leads to large amount of cash consumption and cash generation.
 Attempts should be made to hold the market share otherwise the star will
become a CASH COW.
 Cash Cows :-

Cash cows are usually large corporations or SBUs that are capable of innovating
new products or processes, which may become new stars.
 Low growth, High market share
 They are foundation of the company and often the stars of yesterdayThey
generate more cash than required.
 They extract the profits by investing as little cash as possible
 They are located in an industry that is mature, not growing or declining.
 DOGS :

Dogs hold low market share as compared to competitors and operate in a slowly
growing market. They are at declining stage.
 Low growth, Low market share
 Dogs are the cash traps.
 Dogs do not have potential to bring in much cash.
 Number of dogs in the company should be minimized.
 Business is situated at a declining stage.
 QUESTION MARKS :

Question marks are the brands that holds low market share in fast growing
markets consuming large amount of cash and incurring losses.
 Low growth, Low market share
 Dogs are the cash traps.
 Dogs do not have potential to bring in much cash.
 Number of dogs in the company should be minimized.
 Business is situated at a declining stage.
BCG MATRIX:
 Main tools in BCG Matrix


  Market Share : It is the percentage of the total market that is being
survived by your company, measured in the terms of revenue or volume.
• RELATIVE MARKET SHARES(RMS)

 Market Growth : It is used as measure of a market's attractiveness.

• MGR
• Markets experiencing high growth are ones where the total market share
available is expanding, and there’s plenty of opportunity for everyone to make
money.
BENEFITS AND STEPS OF MATRIX:

 What Are The Benefits Of BCG Matrix?

 BCG Matrix helps decision-makers evaluate the strategic position of products in their
portfolio.
 BCG Matrix helps companies decide which product to invest more in and which product to
discard, thereby increasing profitability
 It helps the company decide the time and opportunity for expansion.
 Steps of BCG Matrix Step :
 1. Choose the unit Step
 2. Define the market Step
 3. Calculate relative market share Step
 4. Find out market growth rate Step
 5. Draw the circles on a matrix