Finally, place each of your product into the relevant quadrant according to their rank in market share and growth.Ĭonsider Samsung, a globally renowned company operating in the electronics industry to better understand the placement of your products with BCG Growth-Share Matrix examples.Draw your chart with the 4 quadrants Question Marks, Stars, Cash Cows, and Dogs.Compare your position with your biggest competitor and analyze the growth in the upcoming five years.First thing’s first – To create your BCG Matrix, gather the data related to the market share and growth of your products.Source: Business News Daily reports, Getting started with a BCG Matrix for your Business BCG Growth Share Matrix has been widely used by companies since 1970 to help them gain insights on the products that best help capitalize their share in the market. Thus, the whole matrix is analyzed according to its cash consumption and generation. Another assumption is that a growing market always requires cash investments in assets to expand the capacity which in turns results in the consumption of cash.The performance of the portfolio is analyzed based on the assumption that an increase in the relative market share results in a simultaneous increase in the generation of cash.Market Growth is simply the number of users or buyers of a particular product or service in the market.

This means a market share represents how much space your product holds in the market. It is the brand or company’s share in the market compared to its leading competitor. What is the Relative Market Share and Market Growth? What actually is a BCG Matrix?Ī BCG or Growth Matrix is divided into four quadrants, analyzed on the basis of Relative Market Share and Market Growth. The matrix empowers companies to decide which product to invest in, which one to develop, and which to discontinue. To ease this stress, Bruce Henderson from Boston Consulting Group developed BCG Product Portfolio Matrix that lends a hand in long-term strategic planning. So, how to know which product brings money into the house and which is draining it? On the other hand, it is much difficult to determine the growth of the rest of the portfolio. Through the amount and frequency of revenues generated, it is easy to identify the profitable products. Products and services not only bring in money, but some may also be draining it. Those who understand the art of the right investments are the ones who take away the cup. A business venture is a matter of constant investments and their profitability. Some grab the cup of victory while others still wonder how they did it.

Owning a business is nothing less than a game of chess where you’ve got to make the right move at the right time.

How to do a bcg matrix