The BCG Matrix, developed by Bruce D. Henderson in 1970, is a strategic tool for analyzing business units based on market share and growth, aiding in resource allocation decisions. Products are categorized into four groups: Cash Cows, Dogs, Question Marks, and Stars, reflecting their performance and cash generation capabilities. Additionally, concepts like the Product Life Cycle, Experience Curve, and Porter's Five Forces model are discussed for assessing market positions and competitive strategies.

1. BCG Matrix

2. • The growth–share matrix is a chart that was
created by Bruce D. Henderson for the
Boston Consulting Group in 1970 to help
corporations to analyze their business units,
that is, their product lines. This helps the
company allocate resources and is used as an
analytical tool in brand marketing,
product management, strategic management,
and portfolio analysis.

3. • The Boston Consulting Group (BGC) growth
share matrix is a planning tool that uses
graphical representations of a company's
products and services in an effort to help the
company decide what it should keep, sell or
invest more in. ... It was developed by BCG in
1970

4. Purpose
According to this techniques products or
business are classified as low or high performers
depending upon the Relative market share and
Market growth

5. Market Share
Market share is the percentage of the total
Market that is served by your company either in
terms of revenue ,units or volume.
RMS= Business Unit Sales this year
Leading rival sales this year
The higher your market share the higher
proportion of the market you control.

6. Market Growth
It is used as a measure of a market
attractiveness
MGR= Individual Sales this year- Individual sales
last year

10. Cash cows(low growth, high market share)
• They are foundation of the company and often
the stars of yesterday
• They generate more cash than required
• They are existing in an industry where the
product is reached maturity and not growing
or declining

11. Dogs(low growth, low market share)
• They are the cash traps
• Dogs do not have potential to bring good for
the company
• High costs and low quality
• Product/business is in declining stage

12. Question marks(High growth, low market
share)
• They will absorb great amount of cash if the
market share remains unchanged(low)
• They have great potential to become stars and
evenly cash cows but can also become dogs
• There should be proper and high investments

13. Stars(high market growth, high market share)
• They are leaders in business
• They also require heavy investments to
maintain its large market share
• It leads to high amount of cash consumption
and cash generation
• Attempts should be made to hold the market
share otherwise the star will become cash cow

14. Why BCG
To assess
• Profile of product/business
• Cash demands of product
• To under the development cycle of products
• To know the resource allocation and
investment decision

15. Benefits
• It is simple and easy to understand
• It helps to quickly and simple screen the
opportunities open to you and help you to
think about how you can make the most of
them
• It is used to identify how corporate cash
resources can best be used to maximize
company future growth and profitability

16. Limitations
• BCG matrix uses only two dimensions –
market share and market growth rate
• Problem of getting data on market share and
market growth is difficult
• High market share does not mean profit all the
time
• Business with market share can be profitable
in long run

19. GE Nine Cell
It is a corporate portfolio analysis technique
based on the pioneering efforts of the General
Electric(GE) of the US supported by the
consulting firm of Mckinsey & Co.

20. Factors under Market Attractiveness and
Competitive Strength
Factors Effecting Market/Industry Attractiveness
• Market Size
• Market Growth
• Market Profitability
• Pricing Trends
• Competitive Intensity/rivalry
• Overall risk of retune in the industry
• Opportunity to differentiate products
and services
• Entry barriers
• Segmentation
• Distribution Structure(Eg: retail
direct , whole sale)
• Technology development
Competitive/Business Strength
• Strength of assets and competenties
• Relative brand strength
• Market Share
• Customers loyality
• Relative Cost position
• Distribution strength
• Record of technology and other
innovation
• Quality
• Access to financial and other
investment resources
• Manufacturing strength

22. Hofer’s Product/ Market Evolution Matrix
• It is 15 cell matrix . The stages of
development of the product or market and
the competitive position of different
businesses in a companies corporate portfolio
is considered

24. Directional Policy Matrix
It was developed by Shell Chemicals- UK
Immediate Market
Withdrawal
Strategy(Divestme
nt)
Phased- Market
Withdrawal
Strategy
Upgrade
Strategy(Cash
generation)
Withdrawal
Strategy(Merger)
Sustain Current
Strategy(Stability
Strategy)
Capability
Enhancement
Strategy(Expansion)
Resource
Withdrawal
Strategy(Cash
generation)
Market Expansion
Strategy(Growth or
Expansion)
Leadership
Retention
Strategy(Innovation
)
C
o
m
p
a
ni
e
s
C
o
m
p
e
ti
ti
v
e
Business Sector Prospects
Unattractive Attractive
Average
Weak
Average
Strong

25. Product Life Cycle
A new product progresses through a sequence
of stages from introduction to growth,
maturity, and decline. This sequence is known
as the product life cycle and is associated with
changes in the marketing situation, thus
impacting the marketing strategy and the
marketing mix.

27. • Introduction – when the product is introduced and
struggles to gain brand recognition
• Growth – advertising and word of mouth helps the
product to increase sales. As sales growth, more
firms are willing to stock the product which helps the
product to grow even further.
• Maturity – When the product reaches peak market
penetration.
• Decline – the product gets eclipsed by new products

28. Example of the Product Life Cycle 2018
• Introduction – Self-driving cars. Self-driving cars are still at the testing
stage, but firms hope to be able to sell to early adopters relatively soon.
• Growth – Electric cars. For example the Tesla Model S is in its growth
phase. Electric cars still need to convince people that it will work and be
practical. As there are more electric charging points and more people
adopt, it becomes easier to sell to those who are more sceptical of new
technology like electric cars.
• Maturity – Ford Focus. The Ford Focus is a well-established car. It has a
good brand reputation and has reached its peak level of market
penetration. It would be difficult to gain a significantly greater market
share. The product life cycle of the Ford Focus has been extended by
constant upgrades and redesigns to keep the car on top of the market.
• Decline – Diesel cars. Since governments have expressed concern at the
level of pollution from diesel cars. Some cities have threatened to ban
diesel cars within a few years. Sales have fallen considerably and the
market for diesel cars may be in terminal decline.

29. Experience Curve
The concept behind the Experience Curve is that
the more experience a business has in
producing a particular product, the lower its
costs. ... The “experience effect” of lower unit
costs is likely to be particularly strong for
large, successful businesses (market leaders)

31. Porters Five Force Model
• What is it?Framework/theory
• Porter's Five Forces of Competitive Position Analysis were developed in
1979 by Michael E Porter of Harvard Business School as a simple
framework for assessing and evaluating the competitive strength and
position of a business organisation.
• This theory is based on the concept that there are five forces that
determine the competitive intensity and attractiveness of a market.
Porter’s five forces help to identify where power lies in a business
situation. This is useful both in understanding the strength of an
organisation’s current competitive position, and the strength of a
position that an organisation may look to move into.
• Strategic analysts often use Porter’s five forces to understand whether
new products or services are potentially profitable. By understanding
where power lies, the theory can also be used to identify areas of
strength, to improve weaknesses and to avoid mistakes.

33. The five forces are:
1. Supplier power. An assessment of how easy it is for suppliers to drive up prices. This is
driven by the: number of suppliers of each essential input; uniqueness of their
product or service; relative size and strength of the supplier; and cost of switching
from one supplier to another.
2. Buyer power. An assessment of how easy it is for buyers to drive prices down. This is
driven by the: number of buyers in the market; importance of each individual buyer
to the organisation; and cost to the buyer of switching from one supplier to another.
If a business has just a few powerful buyers, they are often able to dictate terms.
3. Competitive rivalry. The main driver is the number and capability of competitors in
the market. Many competitors, offering undifferentiated products and services, will
reduce market attractiveness.
4. Threat of substitution. Where close substitute products exist in a market, it increases
the likelihood of customers switching to alternatives in response to price increases.
This reduces both the power of suppliers and the attractiveness of the market.
5. Threat of new entry. Profitable markets attract new entrants, which erodes
profitability. Unless incumbents have strong and durable barriers to entry, for
example, patents, economies of scale, capital requirements or government policies,
then profitability will decline to a competitive rate.

34. What benefits does Porter’s Five Forces analysis provide?
Five forces analysis helps organisations to understand the factors affecting
profitability in a specific industry, and can help to inform decisions
relating to: whether to enter a specific industry; whether to increase
capacity in a specific industry; and developing competitive strategies.
Actions to take / Do’sActions
• Use this model where there are at least three competitors in the
market
• Consider the impact that government has or may have on the industry
• Consider the industry lifecycle stage – earlier stages will be more
turbulent
• Consider the dynamic/changing characteristics of the industry
To Avoid / Don'ts
• Avoid using the model for an individual firm; it is designed for use on
an industry b