BCG Matrix
Term of the Day - 23 January 2024
Today’s Term is “BCG Matrix”.
The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic management tool that helps organisations analyse and categorise their business units or products based on their market growth rate and relative market share. Developed by the Boston Consulting Group (BCG), this matrix classifies business units into four quadrants: Stars, Question Marks, Cash Cows, and Dogs.
Stars: These are products or business units with high market share in a high-growth market. Stars typically require significant investment to maintain their growth and market dominance.
Question Marks (or Problem Children): Question Marks have a low market share in high-growth markets. They require careful consideration and strategic decisions as they can either become Stars with additional investment or decline into Dogs.
Cash Cows: Cash Cows represent products or business units with a high market share in a low-growth market. They generate substantial cash flows and are considered stable and mature.
Dogs: Dogs have low market share in low-growth markets. These products or business units may not be lucrative, and organizations often need to decide whether to divest or revitalize them.
The BCG Matrix provides a visual representation that aids decision-makers in allocating resources, managing product portfolios, and developing appropriate strategies for each category to achieve overall business success.
