It provides a graphic representation for an organization to examine different businesses in it’s portfolio on the basis of their related market share and industry growth rates. It is a two dimensional analysis on management of SBU’s (Strategic Business Units).
2) Usually the measurements required – market growth and relative market share – are available to the company, along with competitive measures, making it relatively easy to execute and prepare. Makes it a very good model for firms looking to pursue market share goals by allocating resources.
Portfolio analysis – BCG, GE
Growth Strategies – Ansoff’s, Porters
2) High market share does not always lead to high profits. There are also high costs involved with high market share.
3) Growth again might not be a good
indicator of appeal as there are other factors to consider such as profit margins amongst
others such as brand name and legal issues. In this case dogs may be better than cash cows
if their profit margins are high.
that make up the company. The reasons it is relevant is so businesses can decide which strategic business units should receive more/less investment, thus to develop growth strategies for adding new products or businesses to the portfolio.
2) Cows (low growth, high business share), Established and successful so need less investment to hold their share
3) Question Marks/ Problem Children (Low share business, high growth), require cash to hold their share and can build into stars but could choose to phase them out
4)Dogs (Low growth, low share), may generate enough cash to maintain themselves but are not that promising . Cash neutral.