Question

Question 1: Parts A and B Refer to the BCG matrix examples below. In each case, the portfolio/s has been tracked over time. Answer the following: A. What is probably happening to make the portfolio move in such a pattern on the BCG matrix? B. What implications are there for the firm managing this portfolio – that is, what guidance is provided by the BCG matrix? BCG Matrix BCG Matrix STARS HIGH | QUESTION MARKS QUESTION MARKS STARS HIGH Year 1 Yr Year 2 Year 3 Year 4 Growth Rate Growth Rate Year 5 Yr 3 Year 6 Yr 4 Year 7 Yr 5 Yr 5 LOW LOW HIGH CASH COWS Relative Market Share DOGS LOW HIGH CASH COWS Relative Market Share DOGS LOW

Answer 1

BCG Matrix shows different products of a company on a graph with 4 quadrants(Star, Question Marks, Cash Cows, Dogs) with respect to market share and growth rate.

Question 1 Part A and B

Picture 1

It is seen from the picture that product in year 1 is in question mark quadrant. It indicates that the product has recently been introduced and has low market share and high growth rate. It requires investment to improve its market share.

As the company makes investment/ spends on the product it moves to quadrant of stars. In this quadrant company generates cash but requires investment also. If the company is able to succeed it moves to cash cow quadrant.

The product has moved to cash cow quadrant in year 6 and 7 it indicates that company now requires little investment but generates sufficient cash which can be used in other business spheres.

Guidance provided by BCG Matrix - The product is in desirable situation as it has strong market share.

Picture 2

It is seen from the picture that first product is in star quadrant in year 1. In this quadrant company generates cash but requires investment also. If the company is able to succeed it moves to cash quadrant.

The product has moved to cash cow quadrant in year 4 and 5. It indicates that company now requires little investment but generates sufficient cash which can be used in other business spheres.

It is seen from the picture that product in year 1 is in question mark quadrant. It indicates that the product has recently been introduced and has low market share and high growth rate. It requires investment to improve its market share.

But if the company doesn't makes investment or even after making investment it is not able to succeed, it moves to dog quadrant.

The product moves to dog quadrant in year 4 and 5. Here the product has low market share and growth rate.

Guidance provided by BCG Matrix - The company can continue the product till it contributes something to the business otherwise it can discontinue it.