BOSTON CONSULTING GROUP MATRIX & THE PRODUCT

Today, The Grandma has continued her English classes with The Bishops in Castelldefels.

First, they have practised must and should modal verbs.

Next, they have created a BCG matrix.

More information: Should/Shouldn't

More information: Must/Mustn't

The growth-share matrix (aka the product portfolio matrix, Boston Box, BCG-matrix, Boston matrix, Boston Consulting Group analysis, portfolio diagram) is a chart created in a collaborative effort by BCG employees: Alan Zakon first sketched it and then, together with his colleagues, refined it.

BCG's founder Bruce D. Henderson popularized the concept in an essay titled The Product Portfolio in BCG's publication Perspectives in 1970. The purpose of the matrix is to help corporations to analyze their business units, that is, their product lines. This helps the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis.

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.

-Cash cows is where a company has high market share in a slow-growing industry. These units typically generate cash in excess of the amount of cash needed to maintain the business.

-Dogs, more charitably called pets, are units with low market share in a mature, slow-growing industry. These units typically "break even", generating barely enough cash to maintain the business's market share.

-Question marks (also known as a problem child or Wild dogs) are businesses operating with a low market share in a high-growth market. They are a starting point for most businesses. Question marks have a potential to gain market share and become stars, and eventually cash cows when market growth slows.

-Stars are units with a high market share in a fast-growing industry. They are graduated question marks with a market- or niche-leading trajectory. The hope is that stars become next cash cows.

As a particular industry matures and its growth slows, all business units become either cash cows or dogs. The natural cycle for most business units is that they start as question marks, then turn into stars. Eventually, the market stops growing; thus, the business unit becomes a cash cow. At the end of the cycle, the cash cow turns into a dog.

As BCG stated in 1970, only a diversified company with a balanced portfolio can use its strengths to truly capitalize on its growth opportunities. 

The balanced portfolio has:

-Stars whose high share and high growth assure the future;

-Cash cows that supply funds for that future growth; and

-Question marks to be converted into stars with the added funds.

More information: BCG

The financial markets generally are unpredictable.
So that one has to have different scenarios...
The idea that you can actually predict
what's going to happen contradicts
my way of looking at the market.

George Soros