Market Applications & practices BCG Matrix

INTRODUCTION
The BCG matrix model was developed by Bruce Henderson in the early 1970 s The BCG matrix stands for Boston consulting group The BCG matrix model is a portfolio planning model The BCG model is a well-known portfolio management tool used in product life cycle theory

Cont
BCG matrix is often used to prioritize which products within company product mix get more funding and attention It has 2 dimensions: MARKET SHARE & MARKET GROWTH The BCG Matrix consist of 4 category in a portfolio of a company Stars, Cash cows, Dogs, Question marks

BCG Model

STARS
Stars = High Growth, High Market Share The use of large amount cash & leader in the business Generates large amount of cash If needed should hold share and reward will be a cash cow if market share is kept

CASH COWS
Cash cows = Low Growth, High Market Share Profit & cash generation should be high Because of the low growth, investments needed should be low, keep profits high Foundation of a company

DOGS
Dogs = Low Growth, Low Market Share Avoid & minimize the number of dogs in a company Beware of expensive turns around plans

QUESTION MARKS
Question marks = High Growth, Low Market Share Question marks have potential to become star and eventually cash cow but can also become a dog

Limitation of BCG Matrix

High market is not the only success factor Market growth is not the only indicator for attractiveness of a market Sometimes dog can earn even more cash as cash cows

Thank you
Devang Kataria 25 Dhiraj Kherajani 26 Disha Desai 27 Faraz Sayed 28 Gurmeet Singh 29 Hardik Dave 30