BCG Matrix

Question 1

BCG Matrix what is it why is it used

Answer 1

The Boston Consulting Group (BCG) Matrix is a tool used by businesses to analyze their product portfolio and make strategic decisions about each product, for instance, allocating resources more effectively once categorizing their products based on the categories in the matrix.

Question 2

4 categories in BCG

Answer 2

Star - High market growth rate, high relative market share

Cash cow - Low market growth rate, high relative market share

Question mark - High market growth rate, low relative market share

Dog - Low market growth rate, low relative market share

Question 3

2 implications of a cash cow

Answer 3

• They generate significant positive cash flow but have low growth potential
• The business invests minimal resources in cash cows as they are seen as stable sources of income

Question 4

Question mark 2 implications

Answer 4

• They often have a negative cash flow, but through continuous investment their market shares can be increased and they can turn into stars
• If the investment does not work to grow the business, the product may be discontinued.

Question 5

Star 2 implications

Answer 5

• They generate significant positive cash flow and have the potential for continued growth
• Marketing efforts focus on building brand recognition, increasing market share, and maintaining profitability

Question 6

Dog 2 implications

Answer 6

• They generate little revenue for the company and no growth potential
• Business often move away from these to focus on more profitable products.