BCG Matrics of Google
- 1. BCG Matrix Group Members Abdul Rashik Devata Venkitesh Faisal NC Melwin Mathew Rethul Kumar Shyam Sankar
- 2. History of BCG Matrix • Founded by Bruce D Henderson in 1963 • A global consulting firm with 42 offline countries • According to this technique business or product are classified as low or high performers depending upon their market growth rate and relative market share
- 3. Market share • Market Share is the percentage of the business unit sales to the total market that is being services by your company measured either in revenue terms or unit volume terms. MS= Business Unit Sales This Year Total Market Size
- 4. Relative market share • Is the percentage of the business unit sales to the highest competitors sales measured either in revenue terms or unit volume terms it indicate the business unit strength RMS= Business unit sale this year______ Leading competitor sales this year RMS= Relative Market Share
- 5. Market Growth Rate MGR= total market sales this year total market sales last year • Market growth is used as a measure of a market’s attractiveness
- 6. Product life cycle and BCG matrix
- 8. Question Marks • High Growth, Low Market Share • Question marks are essentially new products where buyers have yet to discover them. Most businesses start of as question marks in growing markets but have low market share • Question marks have high demand and low returns due to low market share. Investment should be high for question marks • They will absorb great amounts of cash if the market share remains unchanged • Question marks have potential to become stares and eventually cash cow but can become also a dog
- 9. Strategy recommendations • Investment increase market share selectively develop into Stares • Cash Flow Require Funds From Other SBUs ( cash cows) • Unrealized future opportunities • The marketing strategy is to get markets to adopt this products • These product need to increase their market share quickly or they becomes a dog. • The best way to handle question marks is to either invest heavily in them to gain market share or to sell them
- 10. Stares • Stares are leaders in business by having heavy high market share. • They also require heavy investment to maintain its large in a growing market share • Its leads to large amount of cash consumption and cash generations High Growth, High Market Share
- 11. Strategy recommendations • Investment Further Growth maintain market position • Cash flow Self sustaining : fund there own growth require funds from other SBU (Cash Cows) • Assure the future of the company • Grow into the cash cows
- 12. Cash Cow • Low growth, High Market Share • They are foundations of the company and often the stares of yesterday. • They generate more cash then required. • They extract the profit by investing as littlie cash as possible • They are located in an industry that is mature, not growing or declining
- 13. Strategy recommendations • Investment maintain market share maintain capacity • Cash Flow positive cash flow provides funding to support and ?. • No potential for profit growth Stares
- 14. Dogs • Low Growth, Low Market Share • Dogs are the cash trap • Dogs do not have potential to bring in much cash • Number of dogs in the company should be minimized • Business is situated at declining stage
- 15. Strategy recommendations • Investment diversified strategy reduce capacity to free up resources • Cash Flow Goal or positive cash flow negative cash flow • No real growth opportunities
- 17. Conclusion • Though BCG Matrix has its limitations it is one of the most famous and simple portfolio planning matrix, used by large companies having multi-products. • As long as management understands that the BCG growth/Share Matrix generates option which is require further analysis and validation, this tool can greatly enhance strategic decision making.