Abaara topic: B.C.G. analysis

 

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B.C.G. analysis

B.C.G. analysis is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. It involves rating products according to their market share and market growth rate. The products are then plotted on a two dimensional map. Products with high market share but low growth are referred to as "cash cows". Products with high market share and high growth are referred to as "stars". Products with low market share in a low growth market are referred to as "dogs" and should usually be managed for value, that is as much money should be harvested from those products with low or no investments. Products with low market share but high market growth are referred to as "question marks" or "problem children". It is crucial for those products or brands to improve their market share before the market growth is consumed by the competition. The technique can also be applied to a portfolio of companies.


Each circle represents a product or brand. The size of the circle indicates the value of the sales of that product or brand.

















A "question mark" has the potential to become a "star" in the future if it is developed. A company should have a balanced portfolio. This implies having at least one "cash cow" which can generate revenue that can be used to develop one or more "question mark". This process, referred to as "milking your cash cow", is shown in the next diagram where the arrows represent cash flows.


B.C.G. Analysis was originally developed by Bruce Henderson at the Boston Consulting Group in the early 1970s.

see also product management, product portfolio, New Product Development, G.E. Multi Factoral analysis, marketing, strategic management



See also:
| Growth-share matrix |
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This article is from Wikipedia. All text is available under the terms of the GNU Free Documentation License

 

 
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