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BOSTON CONSULING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON OF THE BOSTON CONSULTING GROUP IN THE EARLY 1970’S.
According to this technique, business or product are classified as low or high performers depending upon their market growth rate and relative market share.
THE BCG GROWTH-SHARE MARKET
It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories
Stars
Question marks
Cash caws
Dogs
It is based on the combination of market growth and market relative to the market best competitor.
STARS
High growth, High market share
Stars are leaders in business.
They also require heavy investment, to maintain its large market share.
It leads to large amount of cash consumption and cash generation.
Attempts should be made to hold the market share otherwise the star will become a CASH COW
CASH COW
Low growth, High market share.
They are foundation of the company and often the stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as possible.
They are located in an industry that is mature, not growing or declining.
DOGS
Low growth, Low market share
Dogs are the cash trapa.
Dogs do not have potential to bring in much cash.
Number of dogs in the company should be minimized.
Business is situated at a declining stage
QUESTION MARKS
High growth, Low market share
Most businesses start of as question marks.
They will absorb great amount of cash if the market share remains unchained, (low)
Question marks have potential to become star and eventually cash cow but can also become a dog
Investments should be high for question marks.
But it is noticed that if any units would be face Dog position the units would have to a lot of hard work to improve the
According to this technique, business or product are classified as low or high performers depending upon their market growth rate and relative market share.
THE BCG GROWTH-SHARE MARKET
It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories
Stars
Question marks
Cash caws
Dogs
It is based on the combination of market growth and market relative to the market best competitor.
STARS
High growth, High market share
Stars are leaders in business.
They also require heavy investment, to maintain its large market share.
It leads to large amount of cash consumption and cash generation.
Attempts should be made to hold the market share otherwise the star will become a CASH COW
CASH COW
Low growth, High market share.
They are foundation of the company and often the stars of yesterday.
They generate more cash than required.
They extract the profits by investing as little cash as possible.
They are located in an industry that is mature, not growing or declining.
DOGS
Low growth, Low market share
Dogs are the cash trapa.
Dogs do not have potential to bring in much cash.
Number of dogs in the company should be minimized.
Business is situated at a declining stage
QUESTION MARKS
High growth, Low market share
Most businesses start of as question marks.
They will absorb great amount of cash if the market share remains unchained, (low)
Question marks have potential to become star and eventually cash cow but can also become a dog
Investments should be high for question marks.
But it is noticed that if any units would be face Dog position the units would have to a lot of hard work to improve the