The BCG Matrix or Boston Consulting Group Matrix is a growth matrix that serves to know the product portfolio of a certain company and its viability económica.
The BCG matrix was developed by the Boston Consulting Group (BCG) in the 70s, and tries to analyze the products / services of a company based on:
- The market growth rate: which varies according to the attractiveness of the and your demand.
- The market share rate: assesses the market share relative to our competition.
El objetivo principal de la Matriz BCG es poder ver en qué productos debemos invertir más recursos y en cuáles debemos abstenernos para obtener cierta rentabilidad (o retorno de inversión).
How to make a BCG Matrix: structure
The BCG Matrix is divided into four quadrants by two axes. The vertical axis is the market growth rate; while the horizontal refers to the market share.
Each quadrant into which the Matrix is divided indicates a different type of product: dog, cow, star, and unknown.
It is the type of product that generates liquidity and does not require an excessive investment to function. We must take good care of this product, as it is a consolidated product in a market with little growth.
The main objective is to maintain these types of products that generate income and to be able to invest it in others.
A star product is one that generates us money from a large investment that allows you to get a market share considerable. They are also products that have a growing market.
These are products with high growth potential or market leaders.
They are those that generate a little liquidity and they have a low market share. They are products with low growth and with which we can take different measures: eliminate them; lower costs to sell more products.
They are the products of which we doubt their future evolution. They are products in a fast growing market with a low market share. They need a significant investment to function and to derive either star products or dog products.