The document discusses the BCG matrix, a portfolio management tool developed by the Boston Consulting Group. The BCG matrix analyzes businesses based on their relative market share and growth rate, categorizing them as stars, cash cows, question marks, or dogs. It helps companies allocate resources by understanding which business units require investment, generate cash, or need restructuring. However, the BCG matrix also has limitations as it only considers two factors and does not account for synergies between business units.

1. 1.What is BCG
2.Product life Cycle
3.Who/ Where did it come from
4.BCG matrix
4.1.Star
4.2.Cash Cows
4.3.Question mark
4.4.Dogs
5.Practical use of growth
6.Market share
7.Limitations
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2. • Also referred to as the growth-share matrix
• Popular portfolio management tool
• Comparative analysis of business potential and the
evaluation of environment
• Help companies allocate resources
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4.  Boston Consulting Group
 Bruce Henderson
“To be successful, a company should have a portfolio of product with
different growth rates and different market shares. The Portfolio
composition is a function of the balances between cash flow. High
growth product require cash input to grow. Low growth product should
generate excess cash. Both kinds are needed simultaneously.”-Bruce
Henderson
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7.  High Growth, High market share
 Use large amount of cash
 Share should be kept in order to keep cash
cow reward
 Leader is business
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8.  Low growth, high market share
 Profits and cash will be high
 Initial Investment is low
 Often “Stars of Yesterday”
 Foundation Of a Company
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9. Question marks
 High cash, low market share
 High cash demand with low returns
 Three options:
1. Invest heavily
2. Sell off
3. Invest nothing & generate what cash you can
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10.  Low growth, Low , market share
 Should be avoided and minimized
 Should deliver cash; otherwise should be
liquidated
 Look out for expensive “rescue plans”
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12.  An increase in the demand for a particular product or services
over time.
 Encouraging growth can be expensive
 Higher growth rate means higher demands and investments
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13.  Debates over what defines a high market share
 Most stable position from following rule of 123
 Relative market share carries more information then just cash
flow
 Shows brand positioning over competitors
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14.  Neglects effects of synergy between business units
 High market share is not the only success factor
 Dogs can earn more cash than cash cows
 No clear definition of what constitutes a market
 Only uses two dimension- market share and growth rate
 A business with low market share can also be profitable
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