BCG Matrix Explained With Examples || Product Portfolio Matrix || Boston Matrix
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BCG matrix is also known
BCG matrix is also known as, the Boston matrix, or Boston box, Boston grid, growth share matrix, product portfolio matrix. The man that came up with the matrix is called, Bruce D Henderson. And after watching this video, you will know exactly what is bcg matrix and what do you do with the growth share matrix.
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All of the decisions you are going to need to take according to the information you get from bcg matrix are going to be, corporate level decisions. BCG matrix is also an important component in strategic management,
Now, the matrix. There are two factors that are going to be used to decide where the business unit is going to fall for you. they are, how competitive your product is in the overall market, and how big the market is or how big it can get.
So, the factors are, relative market share, and the growth rate of the market.
So, the relative market share is not actually the market share of your brand. It is the comparison between you and your biggest competitor.
You figure out the growth rate of the market by finding out the total sales in the entire market. It is easy to find actually.
If you have high growth rate, but low market share that will be the question mark. The question mark has the potential to become a star in the future. But, if not properly managed, it can also become a dog.
Now, if you have both high growth rate and high market share, you will have a star on your hand. THEY ARE the best and the most exciting ones to manage.
Then, if you have high market share, but low growth rate, you are going to have a cash cow. They are also great, but not as exciting as managing your starts, because there are not that much growth opportunities. Now, if both the market share and the growth rate are lwo, you will have a dog with you. fun fact, almost everywhere you will see this category referred to as dogs. But they are also called pets.
There are some parallels with BCG matrix and the product life cycle.
A question mark is usually in the introductory stage of the product life cycle. In the growth stage, you get the stars. The cash cows usually come in the maturity stage. And in the declining stage, you get the dogs.
For question marks. You need to invest more that the money that is being generated from the products.
For stars, the money being invested is pretty much the same as the money being generated.
For cash cows, cash generation is much higher than cash needed to invest in the product.s
Now for dogs. Well, they don’t generate that much cash for the business at all. But the thing is, a company, well, any smart company manager is not likely to invest that much money into the dogs anyway. So, the cash consumption and cash generation is pretty much same for the dogs.
Timestamps:
Intro - 0:00
What Is BCG Matrix - 1:47
The Levels Of Strategy - 3:04
The Factors In Consideration - 6:07
The BCG Matrix In Details - 9:07
What To Do After Categorizing The Products - 10:36
Best Case Scenario - 13:04
Worst Case Scenario - 14:27
Assumptions - 15:50
Example 1 - 17:00
Example 2 - 19:20
Example 3 - 20:34
Example 4 - 21:17
BCG vs PLC - 24:50
Money In Every Category - 25:45
Bonus - 27:45
Conclusion and Thanks - 28:28
My Patreon: https://www.patreon.com/user?u=36571443
All of the decisions you are going to need to take according to the information you get from bcg matrix are going to be, corporate level decisions. BCG matrix is also an important component in strategic management,
Now, the matrix. There are two factors that are going to be used to decide where the business unit is going to fall for you. they are, how competitive your product is in the overall market, and how big the market is or how big it can get.
So, the factors are, relative market share, and the growth rate of the market.
So, the relative market share is not actually the market share of your brand. It is the comparison between you and your biggest competitor.
You figure out the growth rate of the market by finding out the total sales in the entire market. It is easy to find actually.
If you have high growth rate, but low market share that will be the question mark. The question mark has the potential to become a star in the future. But, if not properly managed, it can also become a dog.
Now, if you have both high growth rate and high market share, you will have a star on your hand. THEY ARE the best and the most exciting ones to manage.
Then, if you have high market share, but low growth rate, you are going to have a cash cow. They are also great, but not as exciting as managing your starts, because there are not that much growth opportunities. Now, if both the market share and the growth rate are lwo, you will have a dog with you. fun fact, almost everywhere you will see this category referred to as dogs. But they are also called pets.
There are some parallels with BCG matrix and the product life cycle.
A question mark is usually in the introductory stage of the product life cycle. In the growth stage, you get the stars. The cash cows usually come in the maturity stage. And in the declining stage, you get the dogs.
For question marks. You need to invest more that the money that is being generated from the products.
For stars, the money being invested is pretty much the same as the money being generated.
For cash cows, cash generation is much higher than cash needed to invest in the product.s
Now for dogs. Well, they don’t generate that much cash for the business at all. But the thing is, a company, well, any smart company manager is not likely to invest that much money into the dogs anyway. So, the cash consumption and cash generation is pretty much same for the dogs.
Timestamps:
Intro - 0:00
What Is BCG Matrix - 1:47
The Levels Of Strategy - 3:04
The Factors In Consideration - 6:07
The BCG Matrix In Details - 9:07
What To Do After Categorizing The Products - 10:36
Best Case Scenario - 13:04
Worst Case Scenario - 14:27
Assumptions - 15:50
Example 1 - 17:00
Example 2 - 19:20
Example 3 - 20:34
Example 4 - 21:17
BCG vs PLC - 24:50
Money In Every Category - 25:45
Bonus - 27:45
Conclusion and Thanks - 28:28
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