BCG MATRIX – the bcg matrix was developed by Boston Consulting group in 1970s. It is also called as the growth share matrix. This is the most popular and most simplest matrix to describe the corporation’s portfolio of businesses or products.
The BCG matrix helps to determine priorities in a product portfolio. Its basic purpose is to invest where there is growth from which the firm can benefit, and divest those businesses that have low market share and low growth prospects.
Each of the products or business units is plotted on a two dimensional matrix consisting of
a) relative market share – is the ratio of the market share of the concerned product or business unit in the industry divided by the share of the market leader
b) market growth rate – is the percentage of market growth, by which sales of a particular product or business unit has increased
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