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DEFINITION BCG MATRIX
Boston Consulting Group (BCG) Matrix is defined by the following authors as follows:
Table 1 Definition of BCG Matrix
Pearce (2013)
David (2012)
BCG Matrix is an approach pioneered by the Boston Consulting Group that attempted to help managers “balance” the flow of cash resources among their various businesses while also identifying their basic strategic purpose within the overall portfolio.
It is also known as “portfolio techniques”.
BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate.
It allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization.
THEORY EXPLANATION OF BCGGROWTH-SHARE MATRIX
The BCG Matrix Growth-Share Matrix positions the products and services in two ways:
i. The rate of growth of the market ii. The market share of a product/service offered facing the competitors.
Table 2 Definition of market growth rate and relative market share position
Market Growth Rate
Relative Market Share Position
Pearce (2013)
The projected rate of sales growth for the market being served by a particular business.
The market share of a business divided by the market share of its largest competitor.
David (2012)
N.A
The ratio of a division’s own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry.
Structure of the BCG Matrix
Figure 1 The BCG Growth-Share Matrix
Products are classified into four categories which are Question Marks (Quadrant I), Stars (Quadrant II), Cash Cows (Quadrant III) and Dogs (Quadrant IV).
i. Question Marks (Quadrant I)
Question marks are businesses whose high growth rate gives them considerable appeal but whose low market
Boston Consulting Group (BCG) Matrix is defined by the following authors as follows:
Table 1 Definition of BCG Matrix
Pearce (2013)
David (2012)
BCG Matrix is an approach pioneered by the Boston Consulting Group that attempted to help managers “balance” the flow of cash resources among their various businesses while also identifying their basic strategic purpose within the overall portfolio.
It is also known as “portfolio techniques”.
BCG Matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate.
It allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division relative to all other divisions in the organization.
THEORY EXPLANATION OF BCGGROWTH-SHARE MATRIX
The BCG Matrix Growth-Share Matrix positions the products and services in two ways:
i. The rate of growth of the market ii. The market share of a product/service offered facing the competitors.
Table 2 Definition of market growth rate and relative market share position
Market Growth Rate
Relative Market Share Position
Pearce (2013)
The projected rate of sales growth for the market being served by a particular business.
The market share of a business divided by the market share of its largest competitor.
David (2012)
N.A
The ratio of a division’s own market share (or revenues) in a particular industry to the market share (or revenues) held by the largest rival firm in that industry.
Structure of the BCG Matrix
Figure 1 The BCG Growth-Share Matrix
Products are classified into four categories which are Question Marks (Quadrant I), Stars (Quadrant II), Cash Cows (Quadrant III) and Dogs (Quadrant IV).
i. Question Marks (Quadrant I)
Question marks are businesses whose high growth rate gives them considerable appeal but whose low market