BCG growth matrix

Companywide Strategic Planning

Strategic planning is the process of developing
and maintaining a strategic fit between the
organizations goals and capabilities and its
changing marketing opportunities
This type of business plan involves adapting the
firm to take advantage of opportunities in its
constantly changing environment.
1. Annual plan
2. Marketing plan
3. Strategic plan
4. Operational plan
Companywide Strategic Planning
Steps in Strategic Planning
 Companywide Strategic Planning
Defining a Market-Oriented Mission

The mission statement is

the organizations
purpose, what it wants to
accomplish in the larger
environment We help you organize the worlds
Market-oriented mission information and make it
universally accessible and useful.
statement defines the
business in terms of
satisfying basic customer
needs
Companywide Strategic Planning

Setting Company Objectives and Goals

Business Marketing
objectives objectives
Build profitable Increase
customer market share
relationships Create local
Invest in partnerships
research Increase
Improve profits promotion
 Companywide Strategic Planning
Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the
company
Portfolio analysis is a major activity in strategic
planning whereby management evaluates the
products and businesses that make up the
company
 Companywide Strategic Planning
Analyzing the Current Business Portfolio

Strategic business unit (SBU) is a unit of the

company that has a separate mission and
objectives that can be planned separately
from other company businesses
Company division
Product line within a division
Single product or brand
 Characteristics of
Strategic Business Units
(SBUs)
An SBU HAS
A distinct mission and specific target
market
Control over its resources
Its own competitors
Plans independent of other SBUs

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 Companywide Strategic Planning
Analyzing the Current Business Portfolio

Identify key businesses (strategic

business units, or SBUs) that make up
the company

Assess the attractiveness of its various

SBUs

Decide how much support each SBU

deserves
 Boston Consulting Group
Portfolio Matrix

Star

Cash Cow
Portfolio
Matrix
Question Mark

Dog
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 BCG
BCG analysis is mainly used for Multi Category /
Multi Product companies.
All categories and products together are said to be
Business portfolio.
Thus, the various entities of a business portfolio may
move forward by a different pace and with a different
strategy.
The BCG analysis actually helps in deciding which
entities in a business portfolio are actually profitable,
which are duds, which the company should
concentrate on and which gives the company a
competitive advantage over others.
 Portfolio Matrix Strategies

Build

Hold

Harvest

Divest
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Companywide Strategic Planning:
 BCG
BCG Growth Share Matrix The BCG growth share
matrix was developed by Henderson of the BCG group in
1970s. The matrix classifies businesses / SBUs by
1) Relative Market Share The market share of
the business / SBU / Product in the market as compared
to its competitors and overall product / category.
2) Market growth rate The growth rate of the
industry as a whole is taken into consideration from
which the growth rate of the product is extrapolated. This
growth rate is then pitched on the graph.
 Strategies Cash Cow
High market share but low growth rate (most
profitable).
As the market is not growing, that cash cow gains the
maximum advantage by generating maximum revenue
due to its high market share.
Thus for any company, the cash cows are the ones
which require least investment but at the same time
give higher returns.
These higher returns enhance the overall profitability
of the firm because this excess revenue can be used in
other businesses which are Stars, Dogs or Question
marks.
 Strategies
Retention of the market share
Customer satisfaction programs, loyalty
programs and other such promotional
methods
Harvest The company reduces the amount of
investment and tries to take out maximum
cash flow from the said product which
increases the overall profitability.
 Stars in the BCG Matrix
High market share and high growth rate
Investment requirements are high.
 Strategies
Sales promotion
Advertising
Hold The company investment is high
Question Marks in the BCG Matrix
New entry products with good growth rate
but market share is unknown.
 Strategies
New customer acquisition strategies
Build : Increase investments.
 Dogs in the BCG matrix
Low market rate and low growth rate
Negative profitability
 Strategies
Divest to release the amount already
invested
Revamp the product