Q.

A. In accordance with Juneja (n. d), the Boston Consultancy Group [BCG] Matrix is a two-dimensional analysis on
management of strategic business units [SBU]. It assists in the evaluation of the environment of a business. The matrix
has a horizontal axis that measures the relative market share of a product and its strength in the market, thus measuring
the competitiveness of the firm. On the other hand, the vertical axis measures the market growth rate, i.e., the percentage
of growth of a product in the market (Jurevicius, 2021). Boston Consulting Group (1973) states that the matrix provides
a visual summary of an enterprise’s portfolio in terms of its market share, market growth, size of cash contribution, and
its competitive status, i.e., strengths and weaknesses.

In accordance with Jurevicius (2021), the above analysis is split into such quadrants is on the basis of industry
attractiveness and competitive position, as it assists firm in determining which brands they must invest in and vice versa.
These four quadrants are namely stars, question marks, cash cows, and poor dogs (Philip, et al., 2008).
Stars are those products with a high market growth and high market share, as displayed in the above diagram. Hedley
(1977) suggests that products in this category provide a basis for long-term profitability and growth. Stars tend to have
new plant and equipment, high-capacity utilization, high R&D expenses, broad domains, high sales per employee, high
value added, and superiority on a number of competitive devices (Hambrick et al., 1982). For example, Apple’s iPhone.
Hence, these must be retained by the company and the investments in such products should be increased.

Question Marks are those products with a high market growth, but a low market share, as displayed in the above figure.
They are also called ‘problem child’ as it tends to consumer large amounts of cash, but their lower market share tends to
generate lesser amounts of cash (Murthy, 2011). Debrecht and Levas (2014) specify that question marks tend to create
difficulty in decision-making for the management, because based on market growth or decline, a question mark can
either become a star or can even collapse to become a dog. For example, Apple’s Mac Book Air.
Cash Cows are those products with a low market growth, but a high market share, as displayed in the above graphic
representation. Boston Consulting Group (1973) specifies that cash cows require only limited cash investment and
generate significantly much more cash than they actually consume. That is why Mohajan (2018) states that these cows
should be “milked” as much as possible without “killing the cow”. For example, Apple’s iPods.

Lastly, the categorisation of poor dogs are those products with a low market growth and low market share, as displayed
in the aforementioned matrix. These can be building a lot of damage on the management’s resources and time, as they
trap the cash of the business invested in such products of lower potential Murthy (2011). For example, the declining
market for minivans in US, which had an impact for Ford and Chevrolet.

There are a plethora of benefits of the usage of the BCG matrix, as it assists in providing optimum utilisation of
resources for various resources. It is a popular and effective matrix that simplifies the process of decision-making.
Additionally, it enables managers to distinguish many business units and thus, create various strategies to organize and
boost an organisation’s growth and profitability. Conversely, there are disadvantages as well, to this model. This matrix
cannot be solely used, but instead must be used alongside the SWOT analysis model. This is because it would then help
to analyse the market, internally and externally. Another drawback of this matrix is that it does not take into account
potential responses from competitors, which generally helps a company to build their market shares and support
organisational growth (Blythe, 2006).

To conclude, the discussion of the BCG matrix is a product’s portfolio planning graph of four quadrants, assessing the
value of a firm’s various SBUs. It assists business organizations to use it for the present and future development of their
business. This is because it determines and evaluates the level of strategic fit between the company and its business
environment, by allocating effective tools and resources used in strategic management, portfolio analysis, et cetera.