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The BCG Matrix shows the disparities among divisions with respect to relative market share positioning and determines the relations or standing of the organization’s businesses, and market position of products, which also shows the product life cycle (Bozkurt & Ergen, 2014). Products are categorized as question marks in the process of introduction into the market; stars during their growth; cash cows when they have matured; and dogs when they have declined.
Defensive and offensive strategies used in the analysis show that offensive strategies refer to introduction and growth, and defensive to maturity, while withdrawal strategies refer to the decline stage. If there are no competitors during the offensive stage, the target of the attack goes to the customers.
The graphical presentation uses the x-axis and y-axis. A circle represents the divisions, whose sizes equal to its percentage of corporate revenue earned by that business entity. The x-axis refers to a division, which has an advantage of half the market share. The model has limitations because it is so simple and the fact that there is a possibility that one can use it without examining its underlying assumptions. The advantage is that other portfolio strategies adapt or use it as a model, making use of its simplicity. Users should be careful by first analyzing the assumptions.
References
Bozkurt, F. & Ergen, A. (2014). Art of war and its implications on marketing strategies: Thinking like a warrior. International Journal of Research in Business and Social Science, 3(3), 37-47. Web.
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