1. *
Presented by
Group 3

2. *
BOSTON CONSULTING GROUP (BCG)
MATRIX is developed by “BRUCE
HENDERSON “of the BOSTON CONSULTING
GROUP IN THE EARLY 1970’s.
According to this technique, businesses or
products are classified as low or high
performers depending upon their market
growth rate and relative market share.
2

3. The B.C.G Matrix (Boston Box)
The Boston Consulting Group developed a 2 x 2 matrix that allows the portfolio
of products/SBUs to be positioned on the matrix according to:
market growth rate
relative market share (relative to the leading competitor)
The value of the BCG matrix is that it examines the generation and management
of cash within a business. Relative market share is seen as a predictor of the
products capacity to generate cash and market growth is seen as the predictor of
the products need for cash. This suggests that products with high market share
will achieve high sales, but will need less investment in new brands and should
have lower costs due to scale economies. Products in fast growing markets
require higher levels of investment than those in slower growing markets.
Products in low growth markets with a high market share will generate cash,
which can be used to fund other products needing investment.
Nb: Cash flow is not the same as profitability.

5. • are at the introduction stage of the PLC, with high market
growth and low market share.
Question Marks • They are absorbing cash to fund developments in marketing in
attempting to become future stars of the business.
• are the future of the organisation with high market share and
high market growth.
Stars • They are at the growth stage of the PLC but are still absorbing
cash to sustain and develop market share
• are at the maturity stage of the PLC and have high market share,
but market growth is slowing.
CASH COW • Marketing expenditure is limited so cash generated to fund other
product areas of the business
• are at the decline stage of the PLC having both low share and
growth in the market.
DOG • However, they are capable of generating cash in the short term.

6. Relative Market Share
High Low
High Star Question Mark
Cash Generated ++++ Cash Generated +
Market Growth Cash Needed ---- Cash Used ----
0 ---
Cash Cow Dog
Low
Cash Generated ++++ Cash Generated +
Cash Used - Cash Used -
+++ 0
10x 1x 0.1x
The BCG Matrix

7. *BCG MATRIX
High
BUSINESS GROWTH RATE
Low
HIGH LOW
MARKET SHARE

8. STAR
High growth , High market share
Amul Butter – 86% market share
Amul Lite – 80% market share
Amul Instant Full Cream Milk Powder-
80% market share
Amul Milk – 75% market share
Ice Creams -37% market share (HUL-9%,
Mother dairy and vadilal -7%)uld be made
to hold the market share otherwise the star
will become a CASH COW.

9. * QUESTION MARKS
*NUTRAMUL – 15% market share (Competitors-
Bournvita, Horlicks, complan, boost)
*Amul Chocolates – 10% market share
(Competitors – Cadbury – 70% market share,
Nestle)
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10. * CASH COWS
Low growth , High market share
*Amul Spray – 65% market sharear
*Sagar Tea Coffee Whitener – 40% market share
* Processed Cheese -50% market shareocated in an
industry that is mature, not growing or declining.
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11. * DOGS
Low growth, Low market share
*Amul Pizza – 5% market share situated
at a declining stage.
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12. *Amul – Product Portfolio
Category Market Share Market Position
Chocolate Drink 90% 1
Butter, Ghee 85% 1
Cheese 50% 1
Sweets 50% 1
Milk Powder 40% 1
Ice-cream 37% 2
Chocolate 10% 3

13. BENEFITS
• BCG MATRIX is simple and easy to
understand.
• It helps you to quickly and simply screen the
opportunities open to you, and helps you
think about how you can make the most of
them.
• It is used to identify how corporate cash
resources can best be used to maximize a
company’s future growth and profitability.

14. * LIMITATIONS
• BCG MATRIX uses only two dimensions, Relative market share
and market growth rate.
• Problems of getting data on market share and market growth.
• High market share does not mean profits all the time.
• Business with low market share can be profitable too.