In the work of a manager, the question regularly arises: which products and business areas ne to be develop and which ones ne to be liquidat. The BCG matrix is a simple and convenient tool that helps make such decisions and form a company strategy. Let’s figure out how to build and use the Boston Consulting Group matrix.
What is the BCG matrix
The BCG Matrix or Boston Consulting Group Matrix is a strategic planning tool. It can be us to evaluate the success of individual products, entire product categories, and even company divisions.
The main advantage of this tool is its simplicity and clarity. All business country wise email marketing list units in the matrix are divid into four categories, depending on the market share and its growth rate. For each such category, the BCG model gives recommendations on what to do with it:
- Cash cows are products, brands, or divisions that bring in the most money for a company and require no investment.
- “Stars” are a potentially successful product or service that can be actively develop.
- “Question marks” are products or areas that, under certain circumstances, can also become successful. You ne to invest in them carefully .
- “Dogs” are products and services with low potential. It is better to take them out of business.
Typically, these are products and services that have exist for what does the consumer loyalty index give to a business? a long time – they are successful, have a good reputation, and customers trust and buy them regularly. Such products are in the maturity stage of their life cycle. The main task for this category is to maintain a strong position.
For example, Nescafe coffee generates the most revenue among all Nestle products. The Nescafe brand is the “Cash Cow” of this company.
Stars
This category is characteriz by a high relative market share and a high growth rate.
Such products and services are still quite vulnerable, as competition america email list in emerging markets is strong and unprictable. Therefore, significant resources are ne to maintain their current position and develop them. “Stars” ne to be carefully manag to ensure their long-term success.