Summary of the 4 Ps Model. It is important to understand that the MM principles are controllable variables.
Henderson for the Boston Consulting Group in This chart was created with the purpose of helping companies analyze their different business units or product lines. The analysis helps these companies to allocate resources where they are most appropriate as well as to use the results in brand marketing, product management, strategic management, and portfolio analyses.
These decisions include whether to keep a particular business unit, sell it or to invest more in it. The y-axis of the graph represents rate of market growth while the x-axis represents market share.
The matrix helps add input to the decision making process but does not take into account all possible factors that a company may face. These are the cows, the dogs, the stars and the unknowns.
A product line of a business unit is plotted based on its relative market share and rate of growth in the market and falls within one of these categories. This means that they are able to generate revenues in greater amounts than the investment required to maintain their business.
The product line may be considered boring and settled in a mature market, with the company holding it to continue to generate revenues.
The company will attempt to milk these as much as possible with as little investment as possible. Usually, these product lines manage to earn what is put into them, breaking-even and maintaining the market share.
Generally this unit is largely worthless to the company in terms of earning potential but may afford other benefits to the company such as the creation of jobs as well as synergies that assist other business units. These benefits may be enough for the company to keep this business unit active despite its less than exciting position.
However, dogs can negatively affect how investors judge the management of a company and it is suggested that these product lines be sold off. These product lines have a clearly visible market or niche leading path and require large amounts of funding to ensure that they can fight of competitors and maintain their growth rate.
Companies aim to turn stars into their next cash cows with the inevitable decline in the growth of the industry. This can happen potentially if they are able to maintain their position as a market leader. If this does not happen, then stars can turn into dogs.
This is where most businesses will start from and at this point the business unit has the potential to grow market share and turn into a star or lose further marker share and turn into dogs when the growth of the market itself declines.
Careful study and analysis is required for business units in this category to assess their potential and worth.
If any potential is seen then further investment can be made into them.The BCG model in marketing is a matrix developed by the Boston Consulting Group to assess a company's portfolio of products. Products are categorized into one of four categories: "stars," "cash cows," "dogs" and "question marks." Assess your products according to this model to decide which products to invest in and which to discontinue.
BCG Matrix Guide - What is BCG Matrix Analysis. Buy The BCG Growth-Share Matrix: Theory and Applications: The key to portfolio management (Management & Marketing Book 10): Read 1 Kindle Store Reviews - .
BCG Matrix Model. It is also called as BCG model which link ups to marketing and it is a prototype well-known for portfolio management tool, which is used for product life cycle.
Strategic Management > BCG Matrix. The BCG Growth-Share Matrix. The BCG Growth-Share Matrix is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 's. BCG Matrix Guide - What is BCG Matrix Analysis. The BCG Matrix is a fairly easy marketing model with which the portfolio of a business can be analysed. Thereby entrepreneurs can take subtantiated decisions with regards to .
It often used as to prioritize the products within company product mix to get more funding and consideration. BCG Matrix Example: How it can be applied to digital marketing strategies? The BCG Model is based on products rather than services, however, it does apply to both. You could use this if reviewing a range of products, especially before starting to develop new products.
The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy. Boston Matrix- Explained The Boston Matrix model is described in this short revision video and in the study notes that.