Relative Market Share = -1]*100% Important Components of BCG Matrix In BCG Matrix, relative market share helps different companies identify their position in the market compared to their most prominent competitors. The BCG Matrix system depicts the company's portfolio on a quadrant along the relative market share axis (horizontal) and speed of market growth axis (vertical axis). Breakdown of Boston Consulting Group (BCG) MatrixĪ Boston Consulting Group (BCG) Matrix helps companies decide how to prioritize different businesses. By analyzing the BCG Matrix internally, an organization will be able to identify the problems in the early stages and do the necessary work to rectify any issue.įollowing is a quick representation of a BCG Matrix:Ģ.By creating the Growth-Share Matrix, the management team will learn which parts of the organization should provide resources in specific areas.With BCG Matrix, a company will know how all management parts can contribute to its progress.There are several reasons why creating a BCG Matrix is important for your business, like:

This evaluation and analysis of services can be done by creating four different category labels: Dogs, Question Marks, Cash Cows, and Stars. They need to do complete market research and see how investing in a particular product or brand can help them.

It should be noted here that any company cannot go ahead and invest in any product or brand. When we create a BCG Matrix, we primarily analyze the growth opportunities by reviewing the market share of any services or products and further decide where a company should invest to gain the maximum profit.Īs stated in the definition, the primary purpose of BCG Matrix or Growth-Share Matrix is to make investment decisions on a corporate level. As the name suggests, the Growth-Share Matrix helps businesses with long-term strategic business planning.

The Boston Consulting Group (BCG) created BCG Matrix, also known as Growth-Share Matrix, in 1970 to manage strategic experimentation and predict some rapid changes and behaviors in the company. What is the Boston Consulting Group (BCG) Matrix?

Define bcg matrix