The Bcg Matrix In The Boston Consulting Company

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BCG Growth-Share Matrix Introduction The BCG Matrix was evolved in the early 1970s by Bruce Henderson, founder of the Boston Consulting Group, to help corporations make investment and disinvestment decisions related to their business units or product portfolios. The matrix plots business units (or products) that form part of a corporation’s portfolio on a grid of four equal quadrants on the basis of their market growth and market share (which is why the BCG Matrix is also called the “Growth-Share” Matrix). The matrix categorises units as “stars,” “cash cows,” “dogs,” and “question marks,” depending on whether they deserve cash infusions or need to be closed down. Suggested image here: Used on the page: Credit: The quadrants of the matrix Let us study the four categories identified in the matrix. Stars: “Stars” are business units that have a high market share but consume a high amount of cash as they are situated in a high-growth market. Companies that are the first to enter a market and monopolies are described as “stars.” Stars generate cash because of their high market share, but because a high-growth market also demands cash, most of the cash that stars earn is absorbed by their capacity-building activities. Stars may become “cash cows” if they can

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