Boston Consulting Group (Bcg) Growth

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Boston Consulting Group (Bcg) Growth

  1. 1. Boston Consulting Group (BCG) Growth/Share Matrix Dr. Jeff Shay
  2. 2. Portfolio Planning: Four Areas of Emphasis <ul><li>Allocating resources </li></ul><ul><li>Formulating business-unit strategy </li></ul><ul><li>Setting performance targets </li></ul><ul><li>Analyzing portfolio balance </li></ul><ul><ul><li>Cash flow </li></ul></ul><ul><ul><li>Continuity </li></ul></ul><ul><ul><li>Risk </li></ul></ul>
  3. 3. BCG Growth-Share Matrix Relative Market Share Star Question Mark Dog Cash Cow High Market Growth Low Weak Strong
  4. 4. Four Main Strategies of the BCG Model <ul><li>Increase market share </li></ul><ul><li>Hold market share </li></ul><ul><li>Harvest </li></ul><ul><li>Divest </li></ul>
  5. 5. BCG Growth-Share Matrix: Quadrant Characteristics Relative Market Share Star Earnings: high stable, growing Cash flow: neutral Strategy: hold or invest for growth Question Mark Earnings: low, unstable, growing Cash flow: negative Strategy: increase market share or harvest/divest Dog Earnings: low, unstable Cash flow: neutral or negative Strategy: harvest/divest Cash Cow Earnings: high stable Cash flow: high stable Strategy: hold or add market share 30% Market Growth -10% .1 10 1.0
  6. 6. Using the Model: Symbols Product A Previous Market Size and Position Market Share Product A Total Market Product B Market Smaller but firm has greater share B
  7. 7. Plotting Your SBU’s Relative Market Share Star Question Mark Dog Cash Cow 30% Market Growth -10% .1 10 1.0 A B C A C B
  8. 8. Traditional SBU or Product Path Relative Market Share Star Question Mark Dog Cash Cow 30% Market Growth -10% .1 10 1.0 1 2 2 3 4

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