Bcg Matrix Of Microsoft Company Website
How should your company progress? If you are looking for the right strategy for your products or services, the BCG matrix can help. This portfolio matrix helps with analyzing business units e.g. Manufactured products. What are the chances of this product being successful? And above all: is your portfolio set up well enough to achieve long-term success for your company? The BCG matrix tells you what you need to know.
The system was developed for the Boston Consulting Group, which is why the matrix is also known as the “BCG portfolio” or simply the “Boston matrix.” The founder of the group, Bruce Henderson, had already invented the system with four sectors in 1970. His goal was to provide companies with a simple tool with which they could plan their long-term strategy: Which product lines should be invested in and which shouldn’t?
May 4, 2017 - BCG Matrix Template High market share and the products which are actually contributing towards it in the companies can be analyzed easily.
Similar to the, the portfolio matrix consists of four areas, which in turn result from the combination of four different factors. The matrix itself is in a coordinate system: the x-axis indicates the relative market share and the y-axis the market growth.
Both scales range from “low” to “high.” A new zone starts on half the scale. The products in the company’s own portfolio can be placed in these zones depending on the two axes. • Market share: the relative market share results from the company’s own market share compared to that of its strongest competitor. If the value is greater than 1, you are the market leader, otherwise you’re the market follower. • Market growth: Describes the growth of the market for a particular product unit i.e.
The current market volume in comparison to that of the previous period; it is stated as a percentage. Depending on which zone the product is located in, different strategies can be established for your further planning. Question marks Products in the “question mark” category are characterized by high market growth combined with a low market share.
These are generally new products and services that still have a small market share compared to that of the competition, but are in a rapidly growing market. These products are called question marks because it’s impossible to estimate any future development.
In order for the products to be successful in the long term – i.e. To move into the “stars” category – entrepreneurs have to invest a great deal.
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The problem is that it requires a lot of investment to make a question mark product more successful because the item can’t support itself. The strategy is therefore very clear: selection. A company cannot afford to fund every business unit in this area and must choose exactly which product it wants to invest money in.
Stars Stars have both a high market share and high market growth. As market leaders, these “stars” have a high return on investment (ROI). Therefore, it’s not a problem to continue investing in these products and therefore ensure long-term success. If stars maintain their high market share over a longer time, they can become cash cows.
Cash cows Products or services known as “(dairy) cows“ also have a relatively high market share, but are in a market that is growing very slowly or not at all. They generate a very high and steady cash flow even without any investments. On the contrary: Products found in the cash cow area of the portfolio matrix generate the financial means that are invested in question marks or stars. Poor dogs “Poor dogs” are products or services that a company is phasing out.
Market growth is low, stable, or even declining. The relative market share is also low: compared to the market leaders, hardly any sales are generated with these products. As a result, products like these are barely self-sustaining. Companies must pursue a divestment strategy when the product can sustain itself no longer. The capital contained in these products is extracted again in order to have more liquid funds. We’ll use a fictional company: Bob’s Butchers.