The key theory underlying this fact is existence of an experience curve and that market share is achieved due to overall cost leadership.īCG matrix has four cells, with the relative market share and the vertical axis denoting market growth rate. The dimension of business based on strength and relative market share will measure comparative advantage indicated by market dominance. The analysis requires that both measures be calculated for each SBU. Relative market share shows SBU Sales this year leading competitor’s sales this year and market growth share shows industry sales this year minus industry Sales last year. BCG Matrix is a four celled matrix (a 2 X 2 matrix) developed by Bruce Henderson for the Boston Consulting Group in 1970 in USA.īCG matrix helps in doing a comparative analysis of business potential and the evaluation of environment. The general purpose of the analysis is to help understand in which brands the firm should invest in and which ones should be divested. These two dimensions reveal likely prosperity of a strategic business unit (SBU) in terms of cash needed to support that unit and cash generated by it. The matrix classifies business portfolio into four categories based on two dimensions industry attractiveness (growth rate of that industry) and relative market share. Boston Consulting Group’s BCG Matrix is a business analysis tool to evaluate the strategic position of the business in terms of its brand portfolio and its prospects.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |