BCG Matrix is about Product Life Cycle

1. Prof.Arun Kumar

2.  B C G MATRIX : Boston Consulting Group's
growth/share matrix has become one of the
most widely used approaches that facilitate
corporate strategic analysis of likely 'generators'
and optimum "users" of corporate resources.
The BCG matrix is a tool that can be used to
determine what priorities should be given in the
product portfolio of a business unit.

4.  B C G MATRIX :
 Cash Cows: Cash cows are low-growth,
high market-share products or divisions.
Because of their high market share, they have
low costs and generate cash. Since growth is
slow, reinvestment costs are low. Cash cows
provide funds for overhead, dividends, and
investment for the rest of the firm and are in
excess of their needs.

5.  B C G MATRIX :
 Cash Cows:
▪ Cash Cows : = low growth, high market
share.
▪profits and cash generation should be high,
and because of the low growth,
investments needed should be low. Keep
profits high.
▪Foundation of a company.

6.  B C G MATRIX :
 Dogs: Such businesses are defined as those
in which the growth rate is slow and the
relative market share is low compared to the
leading competitors. Because of their low
market share these businesses are often
expected to have a higher cost structure than
industry leaders.

7.  B C G MATRIX :
 Dogs:
▪ Dogs = low growth, low market share
▪avoid and minimise the number of dogs in a
company.
▪beware of expensive 'turn around plans'.
▪deliver cash, otherwise liquidate.

8.  B C G MATRIX :
 Dogs:
▪ Question Marks = high growth, low market
share.
▪have the worst cash characteristics of all,
because high demands and low returns due
to low market share.

9.  B C G MATRIX :
 Dogs:
▪ Question Marks = high growth, low market
share.
▪if nothing is done to change the market
share, question marks will simply absorb
great amounts of cash and later, as the
growth stops, a dog.

10.  B C G MATRIX :
 Dogs:
▪ Question Marks = high growth, low market
share.
▪either invest heavily or sell off or invest
nothing and generate whatever cash it can.
Increase market share or deliver cash.