Overview of
BCG Matrix
BCG Matrix
What is the purpose of the BCG Matrix?
To evaluate a company's product or business portfolio based on market growth and market share, providing insights into which products or businesses to invest in, develop, or divest.
What are the categories included in the BCG Matrix?
Question Marks, Stars, Cash Cows, Dogs
What are the limitations of the BCG Matrix?
Oversimplification, No temporal qualities, and other important variables are not included.
What is the purpose of the IE Matrix?
To evaluate the overall strategic position of an organization by assessing both internal and external factors, helping to determine appropriate strategic actions for each division.
What are the key differences between the BCG Matrix and the IE Matrix?
The basis of analysis, application scope, strategy, and complexity.
What is portfolio analysis?
A tool that compares divisions of a firm to determine how best to allocate resources among those divisions.
Which category has low growth potential and low market share?
Dog
Which category utilizes both product development and retrenchment as a strategy?
Cash Cow
What are the dimensions of the IE Matrix?
The IFE Total Weighted Scores and The EFE Total Weighted Scores
Which matrix can be used in more broad organizational divisions?
The IE Matrix
What are 3 reasons to disclose?
Stakeholders will better understand the firm, which leads to greater support.
Managers and employees will better understand the firm, which leads to greater commitment.
Disclosure enhances the communication process both within the firm and with outsiders.
Which categories have high market growth?
Stars and Question Marks
The BCG matrix is a snapshot of an organization at any given time. What limitation does this statement reflect?
No temporal qualities
Which group of strategies belong to cells III, V, VII?
Hold and Maintain Strategies (Market Penetration and Product Development)
Which matrix is more intuitive and simpler?
The BCG Matrix
What are 4 reasons not to disclose?
To avoid rival firms obtaining free competitive information.
To avoid performance failures being exposed.
To avoid rivalry among segments becoming too intense.
To avoid lucrative markets being revealed to rival firms.
Which categories have low market share?
Question Marks and Dogs
What is the major benefit of the BCG Matrix?
The major benefit of the BCG Matrix is that it draws attention to the cash flow, investment characteristics, and needs of an organization’s various divisions.
Which strategies are apart of the harvest or divest group?
Retrenchment and Divestiture
Investment, Divestment, and Resource Allocation are examples of suggested strategies for which matrix?
The BCG Matrix
What are the dimensions of the BCG Matrix and What do they indicate?
Relative Market Share: Measures a product’s or business unit's market share relative to its largest competitor.
Market Growth Rate: Indicates the growth potential of the market.
Which category represents the best long-run opportunities for growth and profitability?
Stars
What are the other variables mentioned in the presentation that are not included in the BCG Matrix?
The size of the market and competitive advantages
List the range of Internal and External Scores for each Division of the IE Matrix.
Division 1: High Internal and High External Scores
Division 2: High Internal and Low External Scores
Division 3: Low Internal and Low External Scores
The BCG Matrix is ideal for:
The IE Matrix Provides:
The BCG Matrix is ideal for quick, high-level analysis of product portfolios
The IE Matrix provides a more in-depth assessment of an organization's divisions by considering a broader range of internal and external factors.