Helps Understand the Different Types of Marketing Strategies:.The BCG matrix is a reasonably good framework for analyzing product portfolio of a business and determining which businesses are most likely to generate growth. Framework to Analyze Product Portfolio:.The BCG Matrix is still a valuable tool and useful for businesses for a number of reasons: 7 Reasons Why The BCG Matrix Is Still Useful For Businesses Alternatively, if a company has a lot of dog products, it may want to consider discontinuing these products altogether. The BCG matrix can help businesses to understand where they should focus their resources in order to achieve growth.įor example, if a company has a lot of question mark products, it may want to invest more resources in these products in order to make them into stars. Dogs are products or services that are not growing and are not generating much revenue.Question marks are products or services that have potential for growth but are not yet generating much revenue.Cash cows are products or services that are not growing as quickly but are still generating a lot of revenue.Stars are products or services that are growing quickly and generating a lot of revenue for the company.The matrix is divided into four quadrants: stars, cash cows, question marks, and dogs. The BCG matrix is a tool that helps businesses to understand how different products or services contribute to their overall growth. The BCG Matrix is still used by businesses today because it is a simple, easy-to-understand tool that can help companies make decisions about which products or services to invest in. Products or services that are in low-growth markets and have a low market share are considered to be “dogs.” These are products or services that a company should not invest in because they are not likely to generate much revenue. Products or services that are in high-growth markets and have a high market share are considered to be “stars.” These are products or services that a company should invest in because they have the potential to generate a lot of revenue.

Market share: Market share is the percentage of the total market that a company has.Ĭompanies use the BCG Matrix to decide which products or services to invest in.Market growth: Market growth is the rate at which the market for a product or service is growing.It was first developed in 1968 by Bruce Henderson and his colleagues to help multinational companies place various products or services on a 2 x 2 chart based on their market growth and relative share of their industry. The BCG matrix is a powerful tool for businesses. Best Practices for using the BCG matrix to do an analysis.7 Reasons Why The BCG Matrix Is Still Useful For Businesses.

What is bcg matrix