![]() ![]() Money generated from high-market-share/low-growth products is used to develop high-market-share/high-growth products, and low-market-share/high-growth products. The idea behind the BCG (aka growth share) matrix is that the amount of cash that a product uses is proportional to the rate of growth of that product in the market, and the generation of cash is a function of market share for that product. Market Growth Rate = Industry sales this year - Industry Sales last year. Relative Market Share = SBU Sales this year leading competitors sales this year. In other words, it is a comparative analysis of business potential and the evaluation of environment.Īccording to this matrix, business could be classified as high or low according to their industry growth rate and relative market share. It is a two dimensional analysis on management of SBU’s (Strategic Business Units). It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is the most renowned corporate portfolio analysis tool. BCG Matrix is a four celled matrix (a 2 * 2 matrix) developed by Boston Consulting Group, USA. ![]()
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