7.4.2 How important for a business is to identify its products position on the BCG
matrix? What would be your favorite one?
In this fast-forwarding era, every business considers to maximize their profits and keep up with
the market changes. Thus, business models play the vital role in identifying these changes and
provide effective strategies for company future profitability. The BCG matrix, created by Boston
Consulting Group, also known as Growth share matrix, is a 2*2 matrix designed to analyzing
products according to growth and relative market share regarding the long-term strategic
planning (Mohajan, 2018). The BCG model has been used since 1968 (Martin, 2020) to provide
an insight for business units by reviewing portfolio of products (Hanlon, 2021), and analyze firm
resources to make the best strategic decision where to invest, which to sell off, what to
discontinue or develop.
The four- quadrant BCG matrix (2*2), analysis on management the Strategic Business Units
(SBUs), namely industry growth rate on vertical line and relative market share on horizontal
axis. BCG matrix divides the entire product portfolio into four groups.
Stars: Business unit or products with best market share which generate the high return on
investment (ROI). Businesses should invest in their stars and can implement vertical integration,
market penetration, product development, market development, and horizontal integration
strategies. These group has a potential to become cash cow or downgrade to dogs.
matrix? What would be your favorite one?
In this fast-forwarding era, every business considers to maximize their profits and keep up with
the market changes. Thus, business models play the vital role in identifying these changes and
provide effective strategies for company future profitability. The BCG matrix, created by Boston
Consulting Group, also known as Growth share matrix, is a 2*2 matrix designed to analyzing
products according to growth and relative market share regarding the long-term strategic
planning (Mohajan, 2018). The BCG model has been used since 1968 (Martin, 2020) to provide
an insight for business units by reviewing portfolio of products (Hanlon, 2021), and analyze firm
resources to make the best strategic decision where to invest, which to sell off, what to
discontinue or develop.
The four- quadrant BCG matrix (2*2), analysis on management the Strategic Business Units
(SBUs), namely industry growth rate on vertical line and relative market share on horizontal
axis. BCG matrix divides the entire product portfolio into four groups.
Stars: Business unit or products with best market share which generate the high return on
investment (ROI). Businesses should invest in their stars and can implement vertical integration,
market penetration, product development, market development, and horizontal integration
strategies. These group has a potential to become cash cow or downgrade to dogs.
