But most of the time, you will be required to end these SBU. Sometimes, they are able to generate enough cash just to sustain themselves. What are Dogs in the BCG Matrix?ĭogs are those SBU where you have a low market share and also, low market growth rate.
Generally, the cash earned from these SBUs can be reinvested in other SBUs especially in the category of stars and question marks.
Even a small investment will be enough to maintain your market share. What are Cash Cows in the BCG Matrix?Ĭash cows represent those SBU for which you have a high market share but a low growth rate.Īs you have a high market share, you are not required to make massive investments. But as the investment is high, you have to decide on which question mark SBU you want to invest in. With proper investment, you can convert question mark SBU to star SBU. Question marks represent a high market growth rate but still a low market share part of the matrix.Įven though the SBU has a low market share, they still need huge investments because they belong to a market that is growing fast. What are Question Marks in the BCG Matrix? Related: How to Use Swot to Create a Powerful Digital Marketing Strategy? As these SBUs belong to a market that is fast-growing, they require heavy investment to match the growth rate.Īfter these star products have reached maximum growth, they turn into cash cows. Stars represent those SBUs that have a high market share and high market growth rate. The four categories of the BCG matrix are question marks, stars, dogs, and cash cows. What are the Four Categories of the BCG Matrix? Market growth implies how attractive that market and industry are and your market share determines your position in that market /industry.
Click To TweetīCG Matrix Strategy for business growth is widely adopted to help a business consider growth opportunities. A long time ago, they have come up with a matrix to ease the process of strategic planning for a company.īCG is a growth-share matrix where the vertical axis represents the market growth rate and the horizontal axis represents relative market share. What is a BCG Matrix/Growth-Share Matrix?īCG stands for Boston Consulting Group. When we have more than one product/service to offer, sometimes it gets difficult to figure out which SBU to prioritize over others, which SBU is more desirable and profitable than others, and in which SBU to invest more? To deal with those situations, we use the BCG Matrix. In broader terms, SBU can have company divisions, products within one division, or just a single product. The fully-functional, independent products and business lines within a business are known as SBU or strategic business units. 8.1 The Stories of Deadly Business Mistakes That 99% of the Businesses Make
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