Boston Consulting Group Matrix

Question 1

What is the Boston Consulting Group Matrix?

Answer 1

The BCG Categorises a good/service in terms of:

1) Rate of Market Growth
2) Relative Market Share

Question 2

What are the product categories?

Answer 2

STAR = High Growth, Low Market Share
PROBLEM CHILD = High Growth, High Market Share
DOG = Low Growth, Low Market Share
COW = Low Growth, High Market Share

Question 3

What strategy should be implemented if the product is a STAR?

Answer 3

Cash should be reinvested heavily to build upon existing position

Question 4

What strategy should be implemented if the product is a PROBLEM CHILD?

Answer 4

Firm has a choice between “getting out or getting big”

Attractive market but insufficient market share to capitalise

Question 5

What strategy should be implemented if the product is a COW?

Answer 5

Little investment required to defend position

Large enough market share to capitalise on current position