SlideShare a Scribd company logo
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
DHIRAJ SONAWANE
1
• 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
DHIRAJ SONAWANE
2
DHIRAJ SONAWANE
3
 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
DHIRAJ SONAWANE
4
DHIRAJ SONAWANE
5
DHIRAJ SONAWANE
6
 High Growth, High market share
 Use large amount of cash
 Share should be kept in order to keep cash
cow reward
 Leader is business
DHIRAJ SONAWANE
7
 Low growth, high market share
 Profits and cash will be high
 Initial Investment is low
 Often “Stars of Yesterday”
 Foundation Of a Company
DHIRAJ SONAWANE
8
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
DHIRAJ SONAWANE
9
 Low growth, Low , market share
 Should be avoided and minimized
 Should deliver cash; otherwise should be
liquidated
 Look out for expensive “rescue plans”
DHIRAJ SONAWANE
10
DHIRAJ SONAWANE
11
 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
DHIRAJ SONAWANE
12
 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
DHIRAJ SONAWANE
13
 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
DHIRAJ SONAWANE
14

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Dhiraj bcg matrix

  • 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 DHIRAJ SONAWANE 1
  • 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 DHIRAJ SONAWANE 2
  • 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 DHIRAJ SONAWANE 4
  • 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 DHIRAJ SONAWANE 7
  • 8.  Low growth, high market share  Profits and cash will be high  Initial Investment is low  Often “Stars of Yesterday”  Foundation Of a Company DHIRAJ SONAWANE 8
  • 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 DHIRAJ SONAWANE 9
  • 10.  Low growth, Low , market share  Should be avoided and minimized  Should deliver cash; otherwise should be liquidated  Look out for expensive “rescue plans” DHIRAJ SONAWANE 10
  • 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 DHIRAJ SONAWANE 12
  • 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 DHIRAJ SONAWANE 13
  • 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 DHIRAJ SONAWANE 14