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Presentation On: Presented by - Himanshu Bhatnagar

The document presents information on the Boston Consulting Group (BCG) matrix, a portfolio management tool used to evaluate a company's business units. The BCG matrix uses two dimensions - market share and market growth rate - to categorize business units into four categories: cash cows, dogs, stars, and question marks. Examples are provided of how major Indian companies like HUL and ITC have business units that fall into different quadrants of the BCG matrix. Limitations of only considering two dimensions and potential issues with the assessments are also outlined.

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56 views19 pages

Presentation On: Presented by - Himanshu Bhatnagar

The document presents information on the Boston Consulting Group (BCG) matrix, a portfolio management tool used to evaluate a company's business units. The BCG matrix uses two dimensions - market share and market growth rate - to categorize business units into four categories: cash cows, dogs, stars, and question marks. Examples are provided of how major Indian companies like HUL and ITC have business units that fall into different quadrants of the BCG matrix. Limitations of only considering two dimensions and potential issues with the assessments are also outlined.

Uploaded by

amita_singh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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You are on page 1/ 19

PRESENTATION ON

PRESENTED BY – HIMANSHU BHATNAGAR


CONTENTS
• INTRODUCTION
• THE BASIC IDEA
• THE GRAPH
• CASH COWS
• DOGS
• STARS
• THE QUESTION MARK
• USES
• LIMITATIONS
• EXAMPLES
• REFERENCES
• QUERIES
BOSTON CONSULTANCY GROUP
MATRIX

THE BASIC IDEA

“If a product has a bigger market share, or


if the product’s market grows faster it is
better for the company”
INTRODUCTION
• Based on product life cycle, it is a ‘Portfolio
Management Tool’.

• Developed in early 70s by Boston Consulting Group.

• Used to determine upon the priorities given in the


product portfolio of business unit.

• Has two dimensions market share and market


growth.
H
H
H
H
H
H
h
CASH COWS
• Profits and cash generation are high and
because of low growth, investments needed
are low.

• Cash cows are often the stars of yesterday and


they are foundation of a companty
DOGS
• Low market share low growth rate.

• They are cash traps.

• Liable to be divested
STARS
• Generate large amount of cash.

• Have strong relative market share.

• Consume large amount of cash due to their high


growth rate.

• It is suggested that attempts should be made to hold


market share, because they are future cash cows.
THE QUESTION MARK

• Have low market share.

• High cash demands and low returns.

• Market growth is unpredictable.


USES…..

• BCG model is helpful to evaluate balance in firm’s


current portfolio of Stars, Cash Cow, Question mark
and Dogs.

• Is applicable to large companies that seek volume and


experience effects.

• Is simple, easy to understand and easy to apply.

• Provides a base for management to decide and prepare


for future actions.
LIMITATIONS
• High market share is not only the success factor.

• Market growth is not only indicator of market attractiveness.

• Sometimes dogs can earn even more cash than cows.

• A high market share does not necessarily lead to profitability all the
time.

• Limited to only two dimensions.

• A business with a low market share can be profitable too.

• It also neglects small competitors that have fast growing market


shares.
THE BCG MATRIX FOR HUL-CASH COWS

LOW
GROWTH

HIGH MARKET SHARE


BCG MATRIX FOR HUL- STARS

HIGH
GROWTH

HIGH MARKET SHARE


BCG MATRIX FOR HUL- QUESTION MARK

HIGH
GROWTH

LOW MARKET SHARE


THE BCG MATRIX FOR HUL-DOGS

LOW
GROWTH

HIGH MARKET SHARE


THE BCG MATRIX FOR ITC LTD.
Stars ?
Hotels Paperboards/Packaging. •FMCG- Others
Agri business.

Cows Dogs

Cigarettes ITC Infotech.


REFERENCES
• Google images.com
• hul.co.in
• Netmba.com
• Quickmba.com
• valuenotes.com
• Valuebasedmanagement.net
QUERIES
THANK YOU

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