BCG Model in Marketing?
Marketing Management
Unit 2 Scanning Marketing Opportunities Chapter 4 - Strategic Planning Lesson 12 - Business Portfolios, Boston Consulting Group (BCG) Modal Hello students! After having an understanding of what an SBU is you also need to now how do the companies select a particular strategy for which they need to analyze their SBUs? There is a matrix given by the Boston Consultancy Group, which can be used by the companies for the purpose of analysis, which will be discussed in this lesson, and also how useful it is.
BCG Model
The BCG Matrix, named after the Boston Consulting Group (BCG), is perhaps the most famous 2x2 matrix. The matrix measures a company’s relative market share on the horizontal axis and its growth rate on the vertical axis. 20% MarketGrowth rate 10%
10x 4x 2x 1.5x 1x 0.5x 0.4x 0.3x 0.2x
0.1x
Relative Market Share
THE GROWTH SHARE MATRIX- the market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates. It ranges from 0 to 20 percent. A market growth rate above 10 percent is considered high. Relative market share, which is measured on the horizontal axis, refers to the SBU’s market share relative to that of its largest competitor in the segment. A relative market share of 0.1 means that the company’s sales volume is only 10 percent of the leader’s; a relative share of 10 means that the company’s SBU is the leader and has 10 times the sales of the next-strongest competitor in the market.
The growth share matrix is divided into four cells, each indicating a different type of business: 1. Question Mark(Problem Child) – Businesses that operate in high-growth markets but have low relative market shares. A question mark requires a lot of cash because the company has to spend money on plant, equipment and personnel to keep up with the fast-growing market, and because it wants to overtake the market leader. The company has to decide whether to keep pouring money into the
Unit 2 Scanning Marketing Opportunities Chapter 4 - Strategic Planning Lesson 12 - Business Portfolios, Boston Consulting Group (BCG) Modal Hello students! After having an understanding of what an SBU is you also need to now how do the companies select a particular strategy for which they need to analyze their SBUs? There is a matrix given by the Boston Consultancy Group, which can be used by the companies for the purpose of analysis, which will be discussed in this lesson, and also how useful it is.
BCG Model
The BCG Matrix, named after the Boston Consulting Group (BCG), is perhaps the most famous 2x2 matrix. The matrix measures a company’s relative market share on the horizontal axis and its growth rate on the vertical axis. 20% MarketGrowth rate 10%
10x 4x 2x 1.5x 1x 0.5x 0.4x 0.3x 0.2x
0.1x
Relative Market Share
THE GROWTH SHARE MATRIX- the market growth rate on the vertical axis indicates the annual growth rate of the market in which the business operates. It ranges from 0 to 20 percent. A market growth rate above 10 percent is considered high. Relative market share, which is measured on the horizontal axis, refers to the SBU’s market share relative to that of its largest competitor in the segment. A relative market share of 0.1 means that the company’s sales volume is only 10 percent of the leader’s; a relative share of 10 means that the company’s SBU is the leader and has 10 times the sales of the next-strongest competitor in the market.
The growth share matrix is divided into four cells, each indicating a different type of business: 1. Question Mark(Problem Child) – Businesses that operate in high-growth markets but have low relative market shares. A question mark requires a lot of cash because the company has to spend money on plant, equipment and personnel to keep up with the fast-growing market, and because it wants to overtake the market leader. The company has to decide whether to keep pouring money into the