Uploaded byNijo Ninan
Portfolio Matrix
The document discusses portfolio analysis techniques, specifically the BCG growth-share matrix. It explains that the BCG matrix classifies products in a company's portfolio into four categories based on their market growth rate and relative market share: stars, question marks, cash cows, and dogs. Stars have high growth and share; cash cows have low growth but high share. Question marks and dogs have respectively high and low growth and share. The document provides guidelines for how companies should manage products in each BCG category and notes some limitations of the BCG matrix approach.
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Portfolio Matrix
- 1. Portfolio matrix Submitted By-: Janardan Tiwari. • Nijo Ninan.
- 2. CONTENT
- 3.
- 4. Why portfolio….
- 5. When portfolio….
- 6. Techniques of portfolio Techniques Short Description • Based on a graphical representation. 2D and 3D matrices •Preference is given to those variables which are most important to the decision-maker • Based on complex mathematical Algorithms. Mathematical programming • Need computer support. • Methods like decision tress and Others others
- 7. The BCG MatrixProduct Portfolio Method. Product Life Cycle Theory.
- 8. THE BCG GROWTH-SHARE MATRIX It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories: Stars Question marks Cash cows Dogs It is based on the combination of market growth and market share relative to the next best competitor.
- 9. Placing product inBCG Matrix
- 10. STARS Attempts should be made to hold the market share otherwise the star will become a CASH COW
- 11. CASH COWS They are located in an industry that is mature, not growing or declining.
- 12. DOGS Dogs do not have potential to bring in much cash.
- 13.
- 14. High BUSINESS GROWTH RATE Low HIGH LOW MARKET SHARE
- 15. liMitAtionS… BCG MATRIX uses only two dimensions, “Relative Market” share and “Market Growth rate”. Problems of getting data on market share and market growth. High market share does not mean profits all the time. Business with low market share can be profitable too.
Editor's Notes
- #4 BOSTON CONSULTING GROUP (BCG) MATRIX is developed by “BRUCE HENDERSON “of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.
- #5 BCG MATRIX is simple and easy to understand.It helps you to quickly and simply screen the opportunities open to you, and helps you 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 a company’s future growth and profitability.
- #14 Most businesses start of as question marks.They will absorb great amounts of cash if the market share remains unchanged, (low).Why question marks?Question marks have potential to become star and eventually cash cow but can also become a dog.Investments should be high for question marks.
- #16 High market share is not the only success matter. Market growth is not then indicator of the attractiveness of the market.Sometimes dogs can earn even more cash than cash cows.