Asked by: Nelida Micolabusiness and finance business administration
What is the Boston matrix in business?
Last Updated: 28th February, 2020
Click to see full answer.
Also know, how does Boston matrix help a business?
The Boston Consulting group's product portfolio matrix (BCG matrix) is designed to help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue or develop products. It's also known as the Growth/Share Matrix.
One may also ask, how is the Boston matrix useful? The advantages of the Boston Matrix include: It provides a high-level way to see the opportunities for each product in your portfolio. It enables you to think about how to allocate your limited resources to the portfolio so that profit is maximized over the long-term.
Also Know, what is BCG matrix example?
A perfect example to demonstrate BCG matrix could be the BCG matrix of Pepsico. Cash Cows – With a market share of 58.8% in the US, Frito Lay is the biggest cash cow for Pepsico. Stars – Even though Pepsi's share in the market has been reduced to 8.4%, it's still the star for Pepsico because of its brand equity.
How do you create a BCG matrix for a company?
The BCG matrix can be useful to companies if applied using the following general steps.
- Step 1 – Choose the Unit.
- Step 2 – Define the Market.
- Step 3 – Calculate Relative Market Share.
- Step 4 – Calculate Market Growth Rate.
- Step 5 – Draw Circles on the Matrix.