BCG matrix
The BCG matrix is a portfolio management framework that helps companies decide how to prioritise their different businesses by their degree of profitability.
BCG matrix
In short
BCG matrix explained
The BCG matrix is designed to assist in long-term strategic planning. It helps a company consider growth opportunities by reviewing its product portfolio. By using the matrix to analyze the market growth rate and relative market share of their products, companies can identify which products are most likely to generate future revenues and profits, and which may require additional investment or divestment.
The BCG matrix is a portfolio management framework that helps companies decide how to prioritise their different businesses by their degree of profitability.
BCG matrix
Who made this tool?
The Boston Consulting Group is a global management consulting firm, that developed the matrix in the 1970s as a tool for analyzing a company's product portfolio.
When to
use this tool.
The BCG matrix is especially useful for companies with multiple products, services or markets. It helps to analyse a product portfolio, allocate resources more effectively and prioritise investments, to stay competitive and achieve strategic goals.
How to use this tool.
Identify
Identify the product or business units that you want to analyze and gather data on their market growth rate and relative market share.
Categorize
Categorize the products or business units as stars, cash cows, question marks, or pets, based on their position on the matrix.