Question

How can I apply the Boston Consulting Group on the products offered by a company in the clothing retail industry?

Answer 1

Boston Consulting Group (BCG) matrix is used to identify the positioning of different products of a company.

To apply BCG to a company in the clothing retail industry, you need to find the relative market share of the company products and market growth rate for different products. For instance, consider Zara international as a company in the cloth retail industry. The company has different products in women's wear, kid’s wear, men’s wear, and accessories. You can identify the products that have a high market growth rate and high market share, which is a star position and other states. In the case of Zara, fashion denim, TRF collection, Man’s collection, and accessories fall in the star quadrant. Likewise, kid’s wear collection falls in question mark quadrant due to other competitors who are famous brands in children wear.

In the same way, for H&M, you can identify different divisions such as women’s wear, men’s wear, kid’s wear, footwear, sportswear, accessories, and hosiery products and calculate the relative profits from total revenue. For instance, you can find the contribution of H&M’s women’s wear to the total profit of the company and what is the growth potential of women's wear market. if the total profit from women's wear is more than 50 percent of total profit and the industry has the potential to grow, women's wear will in the star quadrant.

The majority of the data, you can find from the official documents of the company. for instance, annual reports of publically listed companies.