BCG Matrix

Question 1

What is the BCG Matrix?

Answer 1

• The Boston Consulting Group (BCG) created a tool to help make strategic decisions.
• Provides a framework for analyzing products according to growth and market share.

Question 2

Market Share

Answer 2

% of an industry’s sales of a good controlled by a specific company

Question 3

Market, or industry, growth rate

Answer 3

Are the numbers of potential customers in the market growing or not?

Question 4

Cash cows

Answer 4

High Market Rate – Low Growth Rate
- These are mature successful products with little need for investment.
- They need to be managed for continued profit (aim to increase cash flow)

Question 5

Stars

Answer 5

High Market Rate – High Growth Rate
- Something that really shines, is outstanding, and this represents a lot of growth in a company.

Question 6

Question Marks

Answer 6

Low Market Rate – High Growth Rate
- Has the potential to become a “star” in the future if it is developed, and later, a cash cow.
- Careful analysis is required to determine whether these question marks are worth the investment required to grow market share.