BCG Matrix & GE Matrix

Prepared by
Kanishk dhingra
Karishma sobti
• The BCG growth-share
matrix displays the various
business units on a graph of the
market growth rate vs. 
market share relative to
competitors
BCG STARS (high growth, high
market share)


Ø Stars are defined by having high market share in a growing

market.
Ø
Ø Stars are the leaders in the business but still need a lot of support
for promotion a placement.
Ø
Ø If market share is kept, Stars are likely to grow into cash cows.

 B C G QUESTION MARKS  (high growth,
low market share)
Ø - These products are in growing markets but have low market
share.
Ø Question marks are essentially new products where buyers have
yet to discover them.
Ø The marketing strategy is to get markets to adopt these products.
Ø Question marks have high demands and low returns due to low
market share
Ø
Ø These products need to increase their market share quickly or
they become dogs.
Ø The best way to handle Question marks is to either invest heavily
in them to gain market share or to sell them.
•  
 BCG CASH COWS (low
growth, high market share)
Ø Cash cows are in a position of high market share in a mature
market.
Ø
Ø If competitive advantage has been achieved, cash cows have high
profit margins and generate a lot of cash flow.
Ø
Ø Because of the low growth, promotion and placement investments
are low.
Ø
Ø Investments into supporting infrastructure can improve efficiency
and increase cash flow more.
Ø
Ø Cash cows are the products that businesses strive for.
 BCG DOGS (low growth, low
market share)
Ø Dogs are in low growth markets and have low
market share.
Ø
Ø Dogs should be avoided and minimized.
Ø
Ø Expensive turn-around plans usually do not help.

S o m e lim ita tio n s o f th :e  B C G m a trix m o d e l
in clu d e

Ø The first problem can be how we define market

and how we get data about market share
Ø A high market share does not necessarily lead to
profitability at all times.
Ø The model employs only two dimensions – market
share and product or service growth rate
Ø The model does not reflect growth rates of the
overall market
 About
A b o u tGE
G E mMatrix
a trix

Ø Developed by McKinsey & Company in

1970’s.
Ø GE is a model to perform business portfolio
analysis on the SBU’s.
Ø GE is rated in terms of ‘Market Attractiveness &
Business Strength’
Ø It is an Enlarged & Sophisticated version of BCG.
•
 Classification
Business Strength
Medium Weak
Strong 5 . 00
High
Attractiveness

3 . 67
Medium
Market

2 . 33
Low

5 . 00 3 . 67 2 . 33 1 . 00
 Market Attractiveness

Ø Annual market growth rate

Ø Overall market size
Ø Historical profit margin
Ø Current size of market
Ø Market structure
Ø Market rivalry
Ø Demand variability
Ø Global opportunities
Ø
Ø
•
•
 Strategies
ØProtect Position
•Invest to grow
•Effort on maintaining strength

ØInvest to Build
•Challenge for leadership
•Build selectively on strength

ØBuild Selectively
•Invest in most attractive segment
•Build up ability to counter competition
•Emphasize profitability by raising productivity
 Strategies
ØLimited Expansion for Harvest
•Look for ways to expand
without high risk
ØManage for Earnings
•Protect position in profitable segment
•Upgrade product line
•Minimize investment

ØHarvest
•Sell at time that will maximize cash value
•Cut fixed costs and avoid investment
meanwhile
 Strategies
ØProtect & Refocus
•Manage for current earning
•Defend strength

ØSelectivity for Earning

•Protect existing program
•Investments in profitable segments

ØBuild Selectively
•Specialize around limited strength
•Seek ways to overcome weaknesses
•Withdraw if indication of sustainable
growth are lacking
 BCG v / s GE
BCG GE
Market Growth Market
Attractiveness
Market share Market strength

4 cell 9 cell
Multi Products Multi Business
Units
Primary tools
Secondary tools
 BCG & GE Matrix
Relative Position
( Market Share ) Business Strength

Attractiveness
Market Growth

Market