Advantages and Limitations of BCG Matrix


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Advantages –

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  • it is easy to use
  • it is quantifiable
  • it draws attention to the cash flows
  • it draws attention to the investment needs

 

Limitations –

  • it is too simplistic
  • link between market share and profitability is not strong
  • growth rate is only one aspect of industry attractiveness
  • it is not always clear how markets should be defined
  • market share is considered as the only aspect of overall competitive position
  • many products or business units fall right in the middle of the matrix, and cannot easily be classified.

BCG matrix is thus a snapshot of an organization at a given point of time and does not reflect businesses growing over time.

 

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We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to contact@bms.co.in.

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