Portfolio Management tool based on market share
and market growth. It was developed by Boston consulting group in early 70 and
it is based on product life cycle theory. The most of the companies insure it
for long term value creation and every company have low growth and high growth
product mean company have portfolio of products.
Analysis of BCG Matrix.
The detailed explanation of BCG Matrix are below with perfect Diagram.
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The BCG Matrix consist of two
dimension market share and market growth.The four segment of BCG Matrix
are below.
1. Stars.
The stars are leader in business and they show high growth
and high market share as well.They should also generate large amount of cash for
business and every company must hold star segment for high growth of
business.
2.
Cash Cows.
Cash cows consist of low growth and high market
share.Profit and cash generation should high and low growth due to less
investment.
3.
Question Mark.
Question market include high market growth and low market
share. They have worst cash advantages because of high cash demand and they
have generate less return because of their low market share.
4.Dogs,
The market share and market growth both have low in dogs
segment, must ignore and minimize the number of dogs in company.
CONCLUSION
The BCG Matrix method can help to understand the portfolio
management strategy of companies. As a result the question mark and Star will
receive investment funds. This model is very simple to understand, and it
provide base for management to take future actions for company. The BCG model is helpful for
manager to do balance in the company current product portfolio of stars,
cows, question mark and dogs
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