Next A 2x2 matrix is an elegant instrument to effectively communicate insights A two-by-two matrix is a simple and effective way of presenting information. It is very popular in consulting because it provides a big picture of options that are MECE. The matrix is generally divided in four segments, which indicate different strategic actions for each option within the respective segment.
If you are working with a product portfolio you have a range of tools at your disposal to determine how each one or a group of the products are doing. Back in a clever chap from Boston Consulting Group, Bruce Henderson, created this chart to help organisations with the task of analysing their product line or portfolio.
The matrix assess products on two dimensions. The first dimension looks at the products general level of growth within its market. Analysing products in this way provides a useful insight into the likely opportunities and problems with a particular product. Lets have a look at what each one means for the product and the decision making process.
Stars high share and high growth Star products all have rapid growth and dominant market share. This means that star products can be seen as market leading products. These products will need a lot of investment to retain their position, to support further growth as well as to maintain its lead over competing products.
This being said, star products will also be generating a lot of income due to the strength they have in the market.
The main problem for product portfolio managers it to judge whether the market is going to continue to grow or whether it will go down. Star product can become Cash Cows as the market growth starts to decline if they keep their high market share. This is due to less competitive pressures with a low growth market and they usually enjoy a dominant position that has been generated from economies of scale.
Cash cows are still generating a significant level of income but is not costing the organisation much to maintain. Dogs low share, low growth Product classified as dogs always have a weak market share in a low growth market. These products are very likely making a loss or a very low profit at best.
These products can be a big drain on management time and resources. The question for managers are whether the investment currently being spent on keeping these products alive, could be spent on making something that would be more profitable.
The answer to this question is usually yes. Problem Child low share, high growth Also sometime referred to as Question Marks, these products prove to be tricky ones for product managers. These products are in a high growth market but does not seem to have a high share of the market.
The could be reason for this such as a very new product to the market. If this is not the case, then some questions need to be asked. What is the organisation doing wrong? What is competitors doing right?
It could be that these products just need more investment behind them to become Stars. A completed matrix can be used to assess the strenght of your organisation and its product portfolio.
Organisations would ideally like to have a good mix of cash cows and stars. There are four assumptions that underpin the Boston Consulting Group Matrix: If you want to gain market share you will need to invest in a competitive package, especially through investment in marketing Market share gains have the potential to generate a cash surplus due to the effect of economies of scale.
We hope that you have found this information useful. This theory forms part of the syllabus for some of the CIM courses that we offer. Please have a look at these if you would like to further your marketing knowledge and skills.
If you would like more information on our CIM Marketing courses please download a copy of our prospectus today.BCG or Boston Consulting Group is one of the world’s leading and largest management consulting companies.
BCG provide consultancy services across various sectors and industries as a part of its marketing mix product and service strategy.
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The Boston Consulting Group (BCG) is a global management consulting firm and the world’s The Boston Consulting Group THE MOST INNOVATIVE COMPANIES Customers flock to novel products and busi-ness models.
Investors bid up new revenue streams. Consider the case of Under Armour, which joined the most innovative companies. Case Study - Amul. As marketing manager take a case study of "Amul Products" & place them in BCG (Boston Consultancy Group Model) & suggest us on what action plan you will take for the brands lying in the Dog & Question mark section Ans.
The Boston Consulting Group (BCG) Matrix is a simple tool to assess a company's position in terms of its product range/5(1). The price of the products of Amul are also decided by the ashio-midori.com GCMMF conducts the market survey to check the validity and feasibility of prices in the market and accordingly decides the price of Amul products.
One will also be paid commission on the minimum selling price (MRP) of Amul products. It is per cent on a milk pouch, 10 per cent on milk products and 20 per cent commission on ice cream. It is per cent on a milk pouch, 10 per cent on milk products and 20 per cent commission on ice cream.