If the firm does not sees it useful, they should be liquidated and the returns invested in either question marks or stars. Generally retrenchment strategies are adopted because these firms can gain market share only at the expense of competitor’s/.rival firms. Instead of providing returns, they consume a lot of cash and provide cost disadvantages to the firm.

These SBUs have low market share and are present in slowly growing markets. What is the BCG Matrix The theory The BCG Matrix is an assessment model in which products or (functional) business units are assessed on two aspects. If the firm sees potential in developing these, then they can get converted into stars and then into cash cows over the period of time. They generally demand huge investments to maintain their market share and the firm has to be very vigilant to analyze these SBUs and accordingly take decisions. These SBUs have low market share but are present highly growing industries. They act as the stable income generating resource of the firm. They require little investments and generate huge returns. It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share). These SBUs command a huge market share but in a slow growing or a mature industry. BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. They also require huge investments to maintain their competitiveness and businesses try to convert them into cash cows. What is BCG matrix The Boston Consulting Group BCG Matrix is a simple corporate planning tool, to assess a company’s position in terms of its product range. The SBUs in this cell have a high market share and survive in a highly growing industry. These classifications in the BCG Matrix are known as Stars, Cash Cows, Question Marks and Dogs.

BCG matrix is divided into four quadrants or categories based on the market share and the growth rate of products.

What is a bcg matrix