Tanveer Hussain Farrukh Kaleem Arslan Ali Rizwana Tabussum Rubila Qayyum

BCG Growth Share Matrix

What is BCG growth-share matrix A MODEL Provides guidance for recourse allocation Most widely used Management instrument Portfolio Management

Introduction Boston Consulting Group (BCG) A general management consulting firm highly respected in Business Strategy consulting.

How to develop BCG Matrix? Relative Market Share = SBU Sales this Year leading Rival’s sales this year Market Growth Rate = Industry sales this year – Industry sales last year Industry sales last year

Strategies to Pursue Build Hold Harvest Digest

Build Market share needs to be increased to strengthen its position Short-term earnings are deliberately sacrifice to gain long-term profits. Suited to Question Marks if they want to become Stars

Hold To maintain the current share position Used by Cash Cows to generate large amount of cash.

Harvest To increase the short-term cash-flow Suited for weak cash cows and for question marks.

Divest Get rid from the particular product line. Best suited for Question Marks

Where to find Information for BCG Company’s annual reports Specialized research organizations

Limitations Product positioning and strong Brand name is not mentioned BCG only focuses on net cash consumption All SBUs are independent but this is rarely realistic The relationship between cash-flow and market share may be weak

Limitations Growth share matrix is based on the assumption … Market Growth is not the only factor …

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