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Portfolio Planning

The BCG Matrix, developed by the Boston Consulting Group, is pivotal for managers in optimizing their investment of scarce organizational resources across competing business opportunities. Particularly useful in multibusiness or multiproduct scenarios, it evaluates business units based on industry growth and market share. The matrix categorizes units into four quadrants: Stars, Question Marks, Dogs, and Cash Cows, guiding strategy formulation about which units to invest in, grow, or divest based on their market position and growth potential.

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Portfolio Planning

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Presentation Transcript

  1. Portfolio Planning • Used to help managers decide on investing scarce organizational resources among competing business opportunities. • Useful for multibusiness or multiproduct situations.

  2. Boston Consulting Group • Who is the Boston Consulting Group? • Most well-known for “The Pricing Paradox” and the BCG Matrix

  3. BCG Matrix • Allows for Strategy Formulation by analyzing business opportunities according to … • Industry or market growth rate • Low versus high • Market share • Low versus high

  4. BCG Matrix High Market Growth Low Low High Market Share

  5. BCG Matrix • Star • Market leader in a growing market. • Invest in further growth. • Question Mark • Poor position in a great market. • Grow or get out High Market Growth • Dog • Poor position in a dieing market. • “Kick the dog to the curb” • Cow • Great position in a market with little growth. • “Milk it” Low Low High Market Share

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