The BCG Matrix (BOSTON CONSULTING GROUP)
The business is represented by a circle whose size depends on the business contribution to corporate revenues. High-growth, weak-competitive position business are called question mark. They require substantial investment to improve their position; otherwise, divestiture is recommended. High-growth, strong-competitive-position businesses are called stars. These businesses require heavy investment, but their strong position allows them to generate the needed revenues. Low-growth, strong-competitive-position businesses are called cash cows. The business generate revenues is excess of their investment needs and therefore fund other business. Finally, low-growth, weak-competitive-position businesses are called dogs. The remaining revenues from these businesses are realized, and then the businesses are divested.
The BCG matrix is not intended as a substitute for management judgment, creativity, insight or leadership. But it is a tool that can, along with other techniques; help managers of the firm as a whole and of its individual business evaluate their strategy alternatives.
* GIVE EXAMPLE OF EACH BCG MATRIX
1. QUESTION MARKS
Roly's Car Wash and Garage
This particular business has high growth because of the demand in its service such as car wash, repairs and safety check-ups however has a weak competitive position because of its low investment, thus, do not generate much cash because it cannot accommodate all its customers.
Apple - Mac Book Air
Because the product is new and needs to be introduced to its market and also needs high market share the product has a weak-competitive position but has a high-growth because it absorb great amount of cash and because the type of product has a high demand on its market.
The business has-high growth because of the demand to its services furthermore the Company is still looking forward in putting up malls all over the...
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