There are relatively few calculations required in order to construct effective BCG matrix. Probably the most difficult decision is to define the market – as there are often numerous ways of defining the market, as is further discussed below.In terms of constructing the BCG matrix after the market definition, there are two calculations required, namely […]
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Using the BCG matrix for portfolio analysisOne of the prime uses of the BCG matrix is for portfolio analysis – that is, to ensure that the overall company has an appropriate mix of business units and/or product in its overall portfolio.In this article on the BCG matrix and portfolio analysis, both good and poor portfolios
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The output of the BCG matrix classifies businesses or brands or products into one of four quadrants.Each of these four quadrants are defined by the intersection of two marketing metrics – namely the market growth rate (a measure of market opportunity and potential) and relative market share (a measure of competitive strength).The four quadrants that
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Although the BCG matrix is a widely used strategic model and is still discussed in many strategy and marketing textbooks, it does carry significant practical limitations. In this article, we detail a list of the top12 BCG limitations and weaknesses.
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Introduction to the BCG matrixThe BCG matrix was developed by the Boston Consulting Group in 1968. It is a portfolio matrix tool and is designed for larger companies to map, compare and analyze their existing business divisions (strategic business units) or sets of products.The Boston Consulting Group matrix is also known as the growth/share matrix
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Overview of the BCG MatrixThe BCG Matrix is a portfolio model developed by the Boston Consulting Group (BCG) in 1968. It has been popularized over time through inclusion in many strategy and marketing textbooks.One of its prime appeals is that it communicates an important element of strategy – that is, the role of competitive strengths
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One of the challenges with the design of the BCG matrix is the decision of what values to place the axes in order to create the four quadrants.Unlike as suggested in other areas of the Internet, these four quadrants do not have to be equal in size. For example, there is one video online that
The BCG Matrix: Where to Draw the Line? Find Out More...
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BCG Matrix exampleIn this example, a retailer with five business portfolios is considered. Their five portfolios include:A chain of supermarketsA set of department storesA convenience store chainA range of specialist fashion stores andA chain of juice barsAs you can see from the BCG matrix, the firm has:One cash cow – their supermarketThey have two stars
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The BCG matrix and relative market shareThe BCG matrix is built around two dimensions – namely market growth rate and relative market share.Market growth rateMarket growth rate is designed to be a measure of market attractiveness and potential. Growth markets provide opportunities to a firm because they are getting much larger, but also because there
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