tanveer hussain farrukh kaleem arslan ali rizwana tabussum rubila qayyum

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 …

Thank you