Cash Cows: The products whose growth is low but holds high market share.Stars: It represents those products which are growing at a faster rate and requires the huge investment to maintain their position in the market.With the help of this matrix, the company can ascertain four kind of strategic business unit or products as follows: The horizontal axis indicates relative market shares, which is an indicator of how strong the company’s position is?.The vertical axis shows market growth rate, which is a measure of how attractive the market is?.To prioritize investment among various business units. To help companies deploy their resources among various business units. Industry attractiveness and Business strengths GE Matrix implies multifactor portfolio matrix, that assist firm in making strategic choices for product lines based on their position in the grid. Content: BCG Matrix Vs GE MatrixīCG Martrix, is a growth share model, representing growth of business and the market share enjoyed by the firm. This article excerpt will help you understand the differences between BCG and GE matrices, take a read. The latter was developed as an improvement over the former, and so overcomes many limitations. Also, for strategist who are interested in helping organization in making informed strategic decisions.Both BCG matrix and GE matrix are two-dimensional models, that are used by big business houses, having several product lines and business units. The project is for business leaders who want formulate their corporate strategy with the goal of effective resource allocation. The example of the case study would empower you to use the model to analyze your company or any other company of your choice. To demonstrate the application of the BCG matrix, we will use a spreadsheet to analyze an energy services company that has five Strategic Business Units (SBUs). The framework is a simple but powerful tool for maximizing corporate competitiveness, and sustainability by allowing them to strike the right balance between exploitation and exploration. The growth vs share model provides an indication of which products an organization should invest in, those they should develop, and the ones they should get rid of. The matrix classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry), and competitive position (relative market share). BCG matrix is a strategic decision-making framework that helps in resource allocation among different strategic business units (SBUs) by categorizing them based on their ability to generate cash inflows against cash outflows.
In this 1-hour long project-based course, you will be able to formulate your corporate strategy with the Boston Consulting Group (BCG) Matrix.
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