[경영전략] BCG Matrix, feat. 시장 성장률 & 상대적 시장 점유율

 BCG Matrix

The business portfolio is the collection of businesses and products that make up the company. The best business portfolio is one that fits the company's strengths and help exploit the most attractive opportunities.

 

The company must:

• Analyze its current business portfolio and decide which businesses should receive more or less investment
• Develop growth strategies for adding new products and businesses to the portfolio, while at the same time deciding when products and businesses should no longer be retained.

 

BCG Matrix

Resources are allocated to business units according to where they are situated on the grid as follows. By using the BCG matrix (shown above), a company classifies all its SBU's accroding to two dimensions as below:

 

Relatvie market share (horizontal axis)

• This serves as a measure of SBU strength in the market

Market growth rate (vertical axis)

• This provides a measure of market attractiveness

 

 

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4 types of SBU can be distinguished as below:

 

 

1. Stars

• High market share, High market growth
• There is still of growth potential in future
• More money is invested now in order to seek long-term gains ("Building" strategy)
• High growth businesses or producs competing in markets where they are relatively strong compared with the competition
• Need heavy investment to sustain growth
• Slow growth

 

 

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2. Cash cows

• High market share, Low market growth (declining industry)
• There is limited growth potential in future (maturity stage)
• Maintain or extend the current position as much as possible ('Holding" strategy)
• Low-growth businesses or products with a relatively high market share
• Mature, successful businesses with relatively little need for investment
• Need to be managed for continued profit - so that they continue to generate the strong cash flows that the company needs for tis Stars

 

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3. Question Marks

• Low market share, High market growth
• There is growth potential in future
• The management should decide whether taking risks and investing for future gains
• More money should be invested
• ('Harvest" strategy)
• Low market share but which oeprate in higher growth markets.
• Have potential, but may require substantial investment in order to grow market share at the expense of more powerful competitors

 

 

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4. Dogs

• Low market share, Low market growth
• There is no growth potential in future
• Decline stage
• Close down the business and use the resources somewhere else in other SBU's
• ("Divest strategy")
• Low relative share in unattractive, low-growth markets
• Generate enough cash to break-even, but they are rarely, if ever, worth investing in.