Boston Consulting Group Matrix
The BCG Matrix is based on the product life cycle theory that can be used to determine what priorities should be given in the product portfolio of a business unit. It has two dimensions: the market share and the market growth. To ensure long-term value creation, a company should have a portfolio products that contains both high-growth products in need of cash inputs and low-growth products that generate lot of cash. The basic idea behind it is that the bigger the market share a product has or the faster the product’s market grow better it is for the company.
Google’s products and services are in the Stars Quadrant (QII). It represents the organization’s best long run opportunities’ for growth and profitability. Divisions with a high relative market share and a high industry growth rate like Google should receive substantial investment to maintain and strengthen their dominant positions. Organizations falling in the Stars quadrant are frequently roughly in balance of net cash flow. However if needed any attempt should be made to hold share, because the rewards will be a cash cow if market share is kept. Forward, backward and horizontal integration; market penetration; market development and product development are appropriate strategies for Google to consider. Elaine, pano tong nakuha ko dun sa isang naresearch ni Jas?? Nalilito ako kung anong tama. Sorry. Google’s products do not fit nicely into a BCG matrix, which is better suited to the incremental innovation at traditionally-managed companies. Figure 7 demonstrated that the company does have a few breakout successes like Book Search, but other seemingly mature product markets such as email yielded success as well. Google does not make money on most of its products, which is a stark contrast to most successful companies. For example, advertisements in the mail interface have notoriously low click rates, because people simple aren’t shopping for products while they are...
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