BCG MATRIX

 BCG MATRIX

The BCG Growth/Share matrix is a popular portfolio analysis tool used by industry practitioners.
A matrix that helps a business with strategic planning:

●       To help the business in finding out the growth opportunities to find the right area of investment

●       Also to discontinue the ones that might lead to losses.

BCG’s growth share matrix used relative market share and annual rate of market growth as criteria for investment decisions, classifying SBU’s as dogs, cash cows, question marks and stars.

STAR

●       These are high growth products with high market share.

●       They need heavy investment

●       Can turn into cash cows

CASH COW

●       These are products with high market share and low market growth.

●       These established SBU’s need less investment to hold onto their market share.

●       They produce a lot of cash to pay bills and support other SBU’s.

Question Mark

●       These are products with high growth but low market share.

●       They require a lot of cash to hold onto their market share.

DOG

●       This product category has low market share and low market growth.

●       These are generally the products which company should drop, as they can bring losses.

●       These require a lot of cash to maintain themselves.

BCG MATRIX

 Star:

Apple’s iPhone fits into this category with a huge demand, and since technology is getting more and more compact, the smartphone category has huge growth potential.

Apple iPad and Apple Smartwatch are also regarded as the Stars for the company and are currently in the transition to become the Cash Cows for the company.

Cash Cows:

There are two products of Apple that fall under the Cash Cow category of BCG Matrix of Question Mark:

Apple, the first being Apple iTunes and the second being Apple MacBook and iMac.

Apple’s Smart Homepad has low market share currently. But with the increasing advent of AI based technologies, like Alexa, this sector has huge growth potential and also Apple TV.

Dogs:

Apple Ipods is a suitable example for this product type.

CONCLUSION:

BCG matrix therefore helps the businesses to plan their investment in the best way possible to grow and survive in the competition in the best way possible by analyzing their product portfolio