In the mid 1960s the Boston Consulting Group (BCG) was founded to provide advice to strategic marketing planners. Building on previous work and evidence relating to the experience curve effect BCG developed a simple, but potentially powerful, framework for analysing an organization’s business with a view to providing strategic guidelines. The essentials of BCG’s growth/share matrix.Compiling the BCG matrixThe completion of the matrix is straightforward. The four steps are:. For each strategic business unit (SBU) or product determine annual growth rate in the market.
According to this growth rate, next determine the extent to which the growth rate is ‘high’ or ‘low’. Normally, growth rates of 10 per cent or more are considered ‘high’.BCG’s growth/share matrix.
For each SBU or product determine relative market share. Normally this is calculated on the basis of market share compared to that of the largest competitor. According to relative market share, determine the extent to which this is ‘high’ or ‘low’.
Normally a relative market share of 10 per cent is required to fall into the ‘high’ category. We now have all the information we need to position our SBUs or products in the matrix. We can also calculate the value of the turnover of each SBU or product and denote this by using circles, where the area of the circle is proportionate to its turnover.Interpreting and using the matrixAn illustration of a completed growth/share matrix. Having completed the growth/share matrix, each SBU may be classified as follows:. Low growth/high share: ‘cash cows’As the term implies, these products or SBUs generate more cash than they use and can be used for funding other products or SBUs. Low growth/low share: ‘dogs’These products or SBUs tend to be loss makers, but might provide small amounts of cash; long term their potential is usually weak. When a ‘dog’ produces a small profit it is termed a ‘cash dog’, and where it produces a loss it is termed a ‘true dog’.
High growth/low share: ‘problem children’ (sometimes called ‘question marks’ or ‘wildcats’) These are products with possible long-term potential, but they tend to use large amounts of cash. This is so if they are to increase their market share, as they must do if they are to survive in the long run. High growth/high share: ‘stars’Managed well, these SBUs or products have the potential to become cash cows of the future.
This means that the company must maintain their market share, usually in the face of strong competition, until market growth subsides. This means that these products or SBUs tend to be heavy users of cash arising from high promotional expenditures in growth markets.The concept of building a balanced portfolioOnce strategic business units have been analysed in this way, a key feature of the BCG approach is its emphasis on the need to build a balanced portfolio of businesses or products.
This notion is captured in the following quote from Lancaster and Massingham:A balanced portfolio would ideally contain few or no dogs, some problem children, some stars and some cash cows. The balance between problem children, stars and cash cows should be such as to ensure that the company has sufficient net positive cash flow from its cash cows to fund its stars and turn them eventually into cash cows. Funds from cash cows are also used to turn products which are currently problem children.
Not all problem children can be moved in this way and eventually some of them will. In the long run all dogs are potential candidates for elimination from the product range.A balanced portfolio is thus intended to ensure sufficient positive net cash flow to guarantee longrun success for the company as a whole. How to highlight text.
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Terms and Condition of Matrix offerI. DEFINITIONS. “ Alliance Partner” shall mean Matrix Cellular (International) Services Ltd.
Bcg Matrix On Icici Payment
ICICI bank is located in India as a multinational bank and this article will discuss the marketing mix of ICICI. Marketing mix of ICICI will include all the P’s that are applicable to the bank related to their market in India. ICICI Bank is also considered as India’s largest private bank dealing with finance and banking services.
The bank’s objectives are to create and expand in the country and provide modern services to the consumers in India. They are often seen to take initiatives that are about awareness for the environment and the people. ProductICICI provides many services to its consumers in India. They consider their customer service as their major product that has also helped them in gaining brand equity in India. The bank operates for 12 hours and always has out of the box initiatives. They provide services like:. Consumer banking: This includes different kinds of accounts, fixed, savings, credit, and special accounts.
Investment banking: Providing services to the consumers who like to invest in different funds nationally and internationally. This involves mutual funds, saving bond and foreign exchange services. Cards: Providing travel, debit and credit card services.
Loans: These include personal, business, medical, vehicle or farming loans. Corporate banking: Providing financial services to businesses. Insurance: Providing various insurance options to their customers. PriceICICI Bank has many different kinds of services to offer to their customers. For most of their services, they have a fixed pricing policy. The pricing of their services depends on the economic factors or currency fluctuations in the country.
Some of their services however come in premium pricing. But, for the most of their pricing policy, the strategy is to be ahead of the market, so aggressive but competitive pricing strategy is implemented. PlaceICICI Bank has various branches all over the country with thousands of ATMs even in remote places in India. In order to remain competitive in the Indian market, it is important for ICICI Bank to keep on expanding to different locations. These locations act as distribution channel to provide their banking services in different parts of the country. PromotionICICI Bank has always focused on customer service and it has also reflected in their promotional strategies.
Their promotion involves direct and indirect communication with the customers. They usually stress on promoting modernized, improved, and convenient banking that is provided to the customers that also benefits them in many ways. Usually in their advertising efforts, the benefits of a certain service to the customers are always highlighted.They usually place their ads in print media with famous celebrities and that has affected their brand equity in India as they have used actors like Amitabh to promote the factor of trust between the bank and the customers. Moreover, they also promote through billboards, digital ads, and TV ads.References7 P’s of Marketing for ICICI BANK. Retrieved from About Us – ICICI Bank. Retrieved from Bhasin, H., BhasinI, H., & Facebook.
(2018, March 07). Marketing Strategy of ICICI Bank – ICICI Bank Marketing Strategy. Retrieved from.
The BCG Matrix is an assessment model in which products or (functional) business units are assessed on two features. First, the relative market share that a certain product or its business unit has with respect to the competition.
Second, the market growth potential for that product or its business unit.This article explains the BCG Matrix in a practical way. After reading you will understand the basics of this powerful marketing and portfolio analysis tool. In this article we also provide you with a free downloadable template. What is the BCG Matrix?For manufacturing businesses it is very functional to have a prior understanding of the market position of their products.
Besides knowing which products need to be promoted more, they will know which products will be successful. For this purpose, the American developed the BCG Matrix in which products or (functional) business units are assessed on two features. The relative market share that a certain product or its business unit has with respect to the competition. The market growth potential for that product or its business unit.The BCG Matrix is also known as the Boston Matrix, the Growth Share Matrix or Boston Consulting Group Matrix. BCG Matrix categoriesThe absolute values of the axes are dependent on the line of business or industry.
This is why the axes are often indicated with high and low. Based on the BCG Matrix a product or business unit can be in one of the four following categories:1. Question markIt is still a big question (problem child / wild cat) what the product is going to do on the market. Often it is concerns a product that is to be introduced and is unknown with a very small market share. It is still uncertain whether it can become a Star or a Cash Cow. StarThe market share of the product grows like a ‘rising star’ in the growth market. With targeted investments such as innovations and adjustments to the product, this lead in the market is maintained.
The product will become more and more familiar. Cash CowThe product is a ‘milch cow’ and big money is made from this. The revenue from the Cash Cow is invested in other products.
DogWhen a product is in the underdog position, it has a small market share in a mature market. If this product is no longer of strategic importance to the company, this product will be divested. SequenceThe most ideal development path of a product is that from Question mark to Star and Cash Cow. The route to Dog should be postponed for as long as possible. Some products remain stuck as a Question mark and become Dogs at an early stage.
This is a costly affair for a business as investments have been made in the product and in the promotion around the product. The route of a product via the ideal development path will eventually bring in money with which investments can be made in other and/or new products that will be deployed in the market as a Question mark. However, for the sake of the continuity of the Cash Cows and/or Stars, Dogs are also necessary.Example: Fast food restaurants in America almost always offer soft drinks ( Dog) for free in combination with a hamburger ( Cash Cow).As a consequence, the sale of the Cash Cows is guaranteed. Strategic choicesOperational management can be determined from the BCG matrix. For a company it entails a lot of risk to fully aim at one of the four categories and from a strategic point of view it is better to distribute the assortment over all four categories. Some strategic choices that are in conformity with the BCG matrix could be: 1.
Build strategyCreate a new brand and a new target audience by means of a Question Mark. Hold strategyMaintain this success and benefit from market growth by means of a Star. Harvest strategyMake as much money as possible with the product by means of the Cash Cow. This can be achieved by improving or renewing the product or by manufacturing by-products. Divest strategyAbandon the investment in the product by means of a Dog; the market is saturated or there is no or little interest in the product.
Criticism on the BCG matrixNotwithstanding the fact that the BCG matrix is applied by many businesses, it has also been criticized:. The market share of the matrix does not guarantee profitability. The BCG matrix does not consider decreasing markets enough; Cash Cows could disappear without reason. Market growth is treated as a given, whereas a business could give the market an incentive. Both axes have been assigned the same value. In practice, this value can depend on the strategy.
The coherence as regards content between products and product groups is not incorporated. The BCG matrix does not show what the competition is doing. The BCG matrix may oversimplify the assessments of the facts.
Download the free BCG Matrix template in editable Word or PDF.It’s Your TurnWhat do you think? Is the BCG Matrix applicable in today’s modern economy and marketing?
Do you recognize the practical explanation or do you have additions? What are your success factors for the good BCG matrix set up?Share your experience and knowledge in the comments box below.If you liked this article, then please subscribe to our Free Newsletter for the latest posts on Management models and methods. You can also find us on, and.More information. Hambrick, D. C., MacMillan, I.
C., & Day, D. The product portfolio and profitability—a PIMS-based analysis of industrial-product businesses. Academy of Management Journal, 25(4), 733-755. Henderson, B. The experience curve–reviewed. The growth share matrix of the product portfolio. Perspectives.
Smith, M. Derrick’s Ice–Cream Company: applying the BCG matrix in customer profitability analysis. Accounting Education, 11(4), 365-375.
Thompson, A. A., Strickland, A.
J., Gamble, J. E., & Zeng’an Gao. Crafting and executing strategy: The quest for competitive advantage: Concepts and cases.How to cite this article:Van Vliet, V. Retrieved insert date from ToolsHero: a link to this page on your website:ToolsHero.com: BCG MatrixDid you find this article interesting?Your rating is more than welcome or share this article via Social media!
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