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The Haier Group
BCG Matrix Explained: How to Use and Create your BCG Matrix
The BCG Matrix is also known as BCG Growth Share Matrix. The BCG Matrix tool and chart (originally developed by the Boston Consulting Group company) are used for developing marketing strategies and performing marketing analysis related to planning and analysis of portfolio of products and services (market offering). The portfolio of market offering analyzed with the BCG Matrix Tools is generally portfolio of products and services offered by the company and company's competitors. The BCG Matrix is also used for strategic analysis of company's SBUs or strategic business units. In both cases the purpose of the BCG Analysis or BCG Chart Matrix is to visually presents the competitive positions of all business portfolio members. The competitive position of each portfolio member is based on the following three marketing metrics:
1. Market Share
2. Market Growth Rate
3. Size or Revenue
The BCG Matrix as an effective business analysis tool can be used for the company's current situation analysis as well as forecasting, marketing planning and estimating the future developments such as potential market positioning of new products, services or SBUs in the marketplace. By using the BCG Matrix Analysis approach business and marketing managers are able to better understand the marketplace and develop effectively plans and strategies. This business analysis helps with planning and optimizing the company's current portfolio of products and services and helps managers make better decisions on how to allocate their marketing resources efficiently and effectively.
BCG Matrix Positions
The BCG Matrix uses simple and yet very powerful approach to position each portfolio memeber (product, service or SBU) into the four-quadrant BCG Matrix. The four quadrants or alternative positions are:
1. Question Marks
2. Stars
3. Cash Cows
4. Dogs
BCG Matrix - Question Marks
The portfolio member positioned in the Question Marks
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