1. BCG Matrix

2. Contents ? Emergence of BCG Matrix Approaches of BCG Matrix
Components of BCG Matrix
Applications of BCG Matrix
Advantages of BCG Matrix
Limitations of BCG Matrix

3. The BCG Matrix . . .
The Boston Consulting Group (BCG), founded in 1963, was a pioneering consulting. It introduced various concepts like ”experience curve” and ”growth-share matrix”
Business growth rate
High
The experience curve says that the cost would come down to certain extent cumulative production is doubled. May establishments got an idea to minimize their cost and expand their capacity aggressively.
Low
However, when inevitable market downturns occured or innovative products were introduced, the flaws of this approach became apparent
High
Low
Relative position (Market Share)
Companies found themselves with excess capacity and outdated product designs, as well as reduced capacity for innovations given their previous focus on cost-cutting

4. Components of BCG Matrix
Each of the four quadrants of the grid has different implication for the SBUs that fall into the category
Stars ?
Question marks
Stars are SBUs that compete where there is high market share and high-growth industries.
Question marks are SBUs which have weak market shares but they compete in high-growth industries.
Cash cows
Dogs
Dogs are SBUs which operate in low-growth industries with weak market shares.
Cash cows are SBUs which operate in high market shares but in low-growth industries.

5. BCG Matrix application
Business growth rate
Invest if needed to create cash cow
Select a few
Divest the others
High
Liquidate
Low
High
Low
Relative position (Market Share)

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