BCG MATRIX/Boston consulting group

BCG MATRIX/Boston consulting group
Introduction,four quarant of BCG matrix, benefits /advantages and limitations/disadvantages.

1. Name: S.Mathubala 1 st MBA Register Number:PS0995 Submitted To:L.M.Mahalakshmi MBA

2. BCG MATRIX 1

3. BCG Matrix Boston Consulting Group (BCG) is otherwise called as Product Portfolio (or) Growth Share Matrix. BCG developed a matrix to analyse and understand the entire business portfolio of a firm. 2

4. FOUR Quadrants of the BCG Matrix The BCG Growth-Share Matrix uses a 2x2 grid with growth on one axis and market share on the other. Each of the four quadrants represents a specific combination of relative market share, and growth. 3

5. . Low Growth, High Share: Companies should milk these “ cash cows ” for cash to reinvest elsewhere. High Growth, High Share: Companies should significantly invest in these “ stars ” as they have high future potential. High Growth, Low Share:   Companies should invest in or discard these “ question marks ,” depending on their chances of becoming stars. Low Share, Low Growth: Companies should liquidate, divest, or reposition these “ pets .” 4

6. Stars: The star business generates high profits and high cash flows. Maximum Investment is advisable in such business or products. For Example: The bottled water Kinley, a Coca-Cola product. 5

7. Question Marks The business has a low market share in a fast growing market. It yields low profits and marginal cash flow. Investment may be made in such business to increase market share. For Example: Fanta, a Coca-Cola product. 6

8. Cash Cows: In this business the firm has a high market share in a slow growing market. Though the profit is low but high cash is being generated. Cows are generally generous and undemanding animals. If you own a cow, what it brings to your home is priceless—fresh, clean and raw milk for long time! It asks only for shelter and some fodder in return. 7

9. Dogs: Business in this category has no future. Therefore, much investment is not advisable. However, if managed well dogs business may become cash cows. A Faithful companion and reliable protector, the dog is also a symbol of  loyalty, honesty, and companionship .    Dogs are often symbolic of love and domesticity. Dogs may also represent sociability and cooperation. 8

10. 9 Benefits: * BCG matrix is simple and easy to understand. * It helps to quickly and simple screen the opportunity open to you, and help you think about how you can make the most of them. * It is used to identify how corporate cash resources can be best be used to maximize company’s future growth & profitability.

11. Limitations: *BCG Matrix uses only two dimensions, Relative market share and market growth rate. *Problems of getting data on market share and market growth. *High market share does not means profits all the time. Business with low market share can be profitable too. 11 10