Transcript Stress Management

BCG Matrix
Contents
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Emergence of BCG Matrix
Approaches of BCG Matrix
Components of BCG Matrix
Applications of BCG Matrix
Advantages of BCG Matrix
Limitations of BCG Matrix
The BCG Matrix . . .
Business growth rate
The Boston Consulting Group (BCG), founded in
1963, was a pioneering consulting. It introduced
various concepts like ”experience curve” and
”growth-share matrix”
High
The experience curve says that the cost would
come down to certain extent cumulative
production is doubled. May establishments got an
idea to minimize their cost and expand their
capacity aggressively.
Low
However, when inevitable market downturns
occured or innovative products were introduced,
the flaws of this approach became apparent
High
Low
Relative position
(Market Share)
Companies found themselves with excess
capacity and outdated product designs, as well
as reduced capacity for innovations given their
previous focus on cost-cutting
Components of BCG Matrix
Each of the four quadrants of the grid has different
implication for the SBUs that fall into the category
Stars
Stars are SBUs that compete
where there is high market
share and high-growth
industries.
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Cash cows
Cash cows are SBUs which
operate in high market shares
but in low-growth industries.
Question
marks
Dogs
Question marks are SBUs
which have weak market
shares but they compete in
high-growth industries.
Dogs are SBUs which
operate in low-growth
industries with weak market
shares.
BCG Matrix application
Invest if needed to
create cash cow
Business growth rate
High
Select a
few
Divest the
others
Liquidate
Low
High
Low
Relative position (Market Share)
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