Boston Consulting Group (BCG) Matrix or also called BCG model relates to marketing. This model is a known as portfolio management tool that used in product life cycle theory. BCG matrix is often used to prioritize which products within company product mix get more funding and attention.
BCG matrix is developed by Bruce Henderson of the Boston Consulting Group, USA in the early 1970's. The BCG Matrix graphically portrays differences among divisions of the firm in terms of relative market share position and the industry growth rate. Figure 1 shows the BCG Martix circles.
Based on FIGURE 1, there 4 divisions respective circles in the BCG Matrix which are question marks, stars, cash cows and dogs. Firstly, the Quadrant 1 which is represent division question marks have a low relative market share position, yet compete in a high-growth industry. Generally, these firms’ cash needs are high and their cash generation is low. Secondly, the Stars which is division in Quadrant 2 represent the organization’s best long-run opportunities for growth and profitability. These businesses have a high relative market share and compete in high growth rate industries.
Thirdly, cash cows which in Quadrant 3 represent high relative market share position, but compete in a low-growth industry. It called cash cows because they generate cash in excess of their needs. The last one is dogs which stay in Quadrant 4 represent the low relative market position and compete in a low-growth industry.
Based on the Hershey Company, is show that Hershey Company stay in stars which is division in Quadrant 2. It is because this company has been established in a long time ago and had been known in everywhere in the world. It can be said that Hershey Company has a large market share in a fast growing industry. They may generate cash but because of fast growing market, stars require huge investments to maintain their lead. Net cash flow is usually modest....
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