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Strama-Report.pptx

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Strama-Report.pptx

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Strama-Report.pptx

  1. 1. BCG Matrix Also known as Growth Share Matrix
  2. 2. • A BCG matrix is a model used to analyze a business’s products to aid with long-term strategic planning. The matrix helps companies identify new growth opportunities and decide how they should invest for the future. • It is created by the Boston consulting group, the BCG matrix also known as the Boston Matrix or Growth Share Matrix provides a strategy for analyzing products according to growth and relative market share. DEFINITION
  3. 3. The BCG matrix considers two different aspects of a business unit or product: 1.What is the current market share? 2.What is the market’s growth potential? The BCG matrix (sometimes called the Growth-Share matrix) was created in 1970 by Bruce Henderson and the Boston Consulting Group to help companies with many businesses or products determine their investment priorities.
  4. 4. Market Share It is the percentage of a market (defined in terms of units sold or revenue) accounted for by a specific product or entity. Relative Market Share
  5. 5. Market Share Market Share by Volume or Unit Market Share Unit Market Share = Total Units Sold ÷ Units in whole Market X 100
  6. 6. Market Share Market Share by Value or Revenue Revenue Market Share = Company’s Total Sales ÷ Total Market Value X 100
  7. 7. Market Growth An increase in the number of people who buy a particular product or service, or the number of products, etc. MARKET GROWTH FORMULA OR = St-St-1 St-1
  8. 8. BCG Matrix Advantages and Disadvantages
  9. 9. BCG Matrix Advantages and Disadvantages Advantage Disadvantage • Easy to Understand •Ignores other Factors of Business • Identification of Opportunities • Simplistic Approach for a Complex situation • Helpful in Removing the Weak area of Business • No Middle Path
  10. 10. How do you Create BCG Matrix?
  11. 11. BCG Matrix Template
  12. 12. Stars quadrant The business units or products with the best market share and generating the most cash are considered Stars. Monopolies and first-to-market products are frequently termed Stars too. Basically those are products that are in high growth markets and that make up a sizable portion of that market. Question mark quadrant These parts of a business have high growth prospects but a low market share. In other words, questionable opportunities are those in high growth markets but in which the company does not maintain a large marker share. Market Share Market Growth
  13. 13. Cash cow quadrant Cash Cows are business units or products with a high market share but low growth prospects, and the company thus milk cash cow for as long as it can. A Cash Cow is a market leader that generates more cash than it consumes. Cash Cows are business units or products with a high market share but low growth prospects. Dog quadrant Dogs, sometimes also referred to as Pets, are units or products with a low market share and low growth rates. Dogs are generally considered cash traps because businesses have money tied up in them, even though they bring back almost nothing in return. These business units are prime candidates for divestiture. Market Share Market Growth
  14. 14. Thank You!

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