BCG Matrix
Boston Consulting Group Matrix (BCG Matrix) also know as Growth-Share Matrix or Product Portfolio Matrix. The chart was created by Bruce Henderson for Boston Consulting Group in the year 1970. BCG Matrix helps businesses to build Strategic management, product management, brand marketing, and portfolio analysis. With BCG Matrix businesses can decide whether they should invest in the product for the future or not.
The Matrix chart is divided into two dimensions and four-cell. The first dimension speaks about Market Growth and the second dimension is about the Market share of products in the market.
There are 4 cells in the chart.
1) Cash cow
2) Star
3) Question mark
4) Dogs
Cash cow
The product has a high market share but less market growth. A cash cow is the market leader and creates more cash for the business. Cash from the cash cow helps the business to fund star and question mark so it can be a cash cow in the future. Let talk about Apple. The Apple iPad has a high market share but less market growth. I pad is No.1 in the tablet industry but due to growth in the smartphone industry, the demand for I pad is getting low and there is less market growth. So Apple should use their cash of cash cow in star product.
Star
The product with high market growth and high market share. Star also generates good profit for the business. Because of high market growth company should fund star products, It can be a future cash cow for business. The Star product for Apple is the iPhone. The smartphone industry has good market growth in the future and I Phone is one of the market leaders of the smartphone industry.
Question Mark
Question Mark product has high market growth but less market share. Question Mark consumes more but gives less return. If businesses work and invest more in a question mark then it can be a star or cash cow in the future. In the case of Apple MacBook is a question Mark for them. In the future is a high growth laptop industry but Apple is not a market leader. If the company works more on MacBook it can the star product in the future.
Dogs
Dogs are that product rang they have low market growth and market share in the market. The dog’s product doesn’t give profit to the company or breakeven. There is less demand in the market for products. I pod is Dog for Apple. It also doesn’t give any return to the company. The firm should less focus on the dog’s product. Because the product is out of trend there are fewer chances of making a profit.
With the help of this chart, the business creates a product investment and product development strategy.
The Marketing Mix it's also known to be 4 p's of marketing. It's an important part of marketing and every business use a marketing mix before launching new products or services and also for the existent product.
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