The matrix is divided into four quadrants based on market growth and relative market share. It can also help companies identify a new product to introduce to the market. The BCG matrix gives the business a framework for evaluating the success of each product to help the company determine which ones they should invest more money into and which they should eliminate altogether.
Most companies offer a wide variety of products, but some deliver greater returns than others.
The matrix helps companies identify new growth opportunities and decide how they should invest for the future. What is a BCG matrix?Ī BCG matrix is a model used to analyze a business’s products to aid with long-term strategic planning. More than 50 years after its inception, the BCG matrix model remains a valuable tool for helping companies understand their potential. The BCG model has been used since 1968 to help companies gain insights on what products best help them capitalize on market share growth opportunities and give them a competitive advantage. This article is for business owners who want to analyze the state of their business and plan for the future of their company.īusiness models are based on providing products or services that are profitable now, but a good business strategy also asks, “What about the future?” Created by the Boston Consulting Group, the BCG matrix – also known as the Boston matrix or growth-share matrix – provides a strategy for analyzing products according to growth and relative market share.There are drawbacks to using a BCG matrix, so some organizations may want to consider alternative models.The process can help business owners improve products, identify new opportunities, and even determine services to eliminate.A BCG matrix helps businesses understand their current and future competitive landscapes.
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