Usefulness of BCG Matrix in Business

Organizations which are large and have multiple products and services usually face the challenge of the allocation of resources among those business units. Using the BCG Matrix such organizations can obtain several benefits such as the ones listed below. 1. Simplifies management The BCG is an effective management tool and it offers a good framework for resource allocation among various units. This enables the managers to compare several business units whenever they want. It simplifies many business factors through showing employees the market share as well as growth rate and how to use them to create new strategies.

2. Popular matrix Even though BCG matrix may be among the oldest matrices ever formulated, it is also the most common and best known matrix taught all over the world. There are forums on the internet where individuals share their ideas on the best methods of using BCG matrix because of its popularity. This means that those looking to use it will never lack assistance and support. The BCG still remains a quick and beneficial guide for resource allocation and ensuring better profits.

3. Better decision making The BCG allows for the making of comparisons so as to measure the growth and development rate of a company against the average growth rate in that specific industry. In addition, this particular matrix is also enjoyable to use, encouraging better decision making. Large organizations that are normally in need of effective decision making can benefit a lot from using BCG matrix, especially those seeking better resource management. Nevertheless, the BCG model only takes into account two dimensions, which are growth rate and market share. This might tempt the management to focus on a certain product or divest prematurely.