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BCG Matrix and SWOT Analysis Overview

i) The BCG matrix categorizes products and business units into four categories based on their market share and growth rate: Stars, Cash Cows, Question Marks, and Dogs. ii) Stars are high-growth, high-market share products that require heavy investment. Cash Cows are low-growth, high-market share products that generate cash. Question Marks are low-market share products in high-growth markets that require investment. Dogs are low-growth, low-market share products. iii) The four strategies that can be applied are Build, Hold, Harvest, and Divest depending on whether the goal is to increase market share, maintain share, increase cash flow, or divest

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13 views6 pages

BCG Matrix and SWOT Analysis Overview

i) The BCG matrix categorizes products and business units into four categories based on their market share and growth rate: Stars, Cash Cows, Question Marks, and Dogs. ii) Stars are high-growth, high-market share products that require heavy investment. Cash Cows are low-growth, high-market share products that generate cash. Question Marks are low-market share products in high-growth markets that require investment. Dogs are low-growth, low-market share products. iii) The four strategies that can be applied are Build, Hold, Harvest, and Divest depending on whether the goal is to increase market share, maintain share, increase cash flow, or divest

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ATUL AB
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2.

Using the matrix, organisations can identify four different types of products or SEU
as follows:

i) Star

Stars are products or SBUs that are growing rapidly.

They also need heavy investment to maintain their position and finance their rapid
growth potential.

They represent best opportunities for expansion.

i) Cash cOw

Cush Cowsare low-growth, high market share businesses or ducts.


They generate cash and have low costs.
They are established, successful, and need less investment to maintain their
market share. In long run when the growth rate slows down, stars become cash
cows.

i) Question mark
Question Marks, sometimes called problem children or wildcats, are low market
share business in high-growth markets.
They require a lot of cash to hold their share.

They need heavy investments with low potential to generate cash.


It is for business organisations to turn them stars and then to cash cows when the
growth rate reduces.

iv) Dogs

Dogs are low-growth, low-share businesses and products.


They may generate enough cash to maintain themselves, but do not have much
futur. Sometimes they may need cash to survive.
Dogs should be minimised by means of divestment or liquidation.
3 Thefourstrategies that can be pursued are:
Build: Qwotton Merck
Here the objective is to increase market share, even by forgoing short-term
earnings in favour of building a strong future with large market share.
Hold:

t Here the objective is to preserve market share.


Harvest: Cath Cewt
regardless of long- term effect.
a Here the objective is to increase short-term cash flow
) Divest:
resources can be
Here the objective is to sell or liquidate the business because
better used elsewhere.
4. Conclusion

BCG matrix can be difficult, time-consuming, and costly to implement.

Management may find it difficult to define SBUs and measure market share and
growth.

advice for future


It also focuses on classifying current businesses but provide little
planning.
market-share growth
They can lead the company to placing too much emphasis on
markets.
or growth through entry into attractive new
THE BCG MATRIX
Market share
High Low

High

Market
growth
?

Low

Global Accreditation Body for


USMstudy
Targeting success Sales &Marketing Certifications
Apple BCG Matirx
Growth
New Ventures
Rapid growth and Risks, and few
expansion High becomes stars, other
diversted

Growth
Market
Star Question Mark
iPhone Apple TV

Low Market Share


Fund
C Bog tow market share and
The ability to fund the pple iTunes and Apple MacBook IPod the growth of
diversification
questions marks and
stars Low

High Market Share Iow


SWOT ANALYSIS

W
TRENGHTS EAKNESSES

S
Not enough resources
Fast return on Investment High Price
Brand loyalty INTERNAL
Strong Network Lower operating Income FACTORS

PPOTUNITIES HREATS

T
Moving to new Geographic l . New governance rules EXTERNAL
Markets FACTORS
Rapid technology changes
Being more competitive

POSITIVE NEGATIVE

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