Concept Of Bcg Matrix

It was published in one of bcg s short provocative essays called perspectives.

Concept of bcg matrix.

The growth share matrix was created in 1968 by bcg s founder bruce henderson. A commonly used bcg matrix example is that of coca cola. It classifies business portfolio into four categories based on industry attractiveness growth rate of that industry and competitive position relative market share. Devised as a portfolio planning tool or corporate planning tool the bcg growth share matrix was first conceived by bruce henderson of the boston consulting group back in the 1970 s.

To understand bcg based growth it can be worthwhile to look at a real life bcg matrix example and then share the matrix with your team. Boston consulting group bcg matrix is a four celled matrix a 2 2 matrix developed by bcg usa. Boston consulting group matrix definition. Bcg matrix is a 2x2 matrix bifurcating products based on high and low growth rate and market share.

The bcg matrix is an assessment model in which products or functional business units are assessed on two features. Today it is still central in business school teachings on strategy. Bcg matrix is a framework created by boston consulting group to evaluate the strategic position of the business brand portfolio and its potential. It is the most renowned corporate portfolio analysis tool.

The concept is based on four quadrants in which a company s strategic business units sbu or products brands are classified. First the relative market share that a certain product or its business unit has with respect to the competition. Second the market growth potential for that product or its business unit. 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.

At the height of its success the growth share matrix was used by about half of all fortune 500 companies. The boston consulting group s product portfolio matrix bcg matrix is designed to help with long term strategic planning to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest to discontinue or develop products. Bcg matrix is a performance measurement tool for the products of a company. The bcg growth share matrix is a tool used internally by management to assess the current state of value of a firm s units or product lines.

Developed by bruce henderson of boston consulting group in the early 1970s bcg matrix is a strategic tool to analyse a business s portfolio on the basis of relative market share and industry growth rate.