3rd Lesson_BCG

1.

Boston
Consulting
Group
strategy
(matrix)
Teacher: Yerlan Iskanderov

2.

LESSON OBJECTIVES
• To understand the essence
of BCG matrix;
Describe the purpose of the
BCG Growth Share Matrix;
Calculate Market Growth
Rate;
Calculate Relative Market
Share.

3.

•?
WARM-UP
Why do companies need strategy?
Should a company invest equally in
all products? Why/Why not?

4.

•?
INTERNET RESEARCH
• What is the Boston Consulting Group (BCG), and
how does it function in business analysis?
• Why is the BCG matrix considered a critical tool in
strategic management and decision-making?
• What are the advantages and limitations of
employing the BCG matrix in organizational
strategy formulation?

5.

•?
DEFINTION
The Boston Consulting Group (BCG) growth
share matrix is a planning tool that uses graphical
representations of a company’s products and
services to help the company decide what it
should keep, invest more money in, or sell.

6.

Boston Consulting Group strategy.
Their strategy focuses on creating value through innovation, digital transformation, and portfolio
optimization, often moving beyond rigid, traditional planning to agile, faster decision-making.
• Stars (High Growth, High Share): Require heavy
investment to maintain their position and eventually
become cash cows.
• Cash Cows (Low Growth, High Share): Established
products that generate high cash flow with low
investment; used to fund other categories.
• Question Marks (High Growth, Low Share): Potential
for high growth but low market share; require heavy
investment to become stars, or they risk becoming
dogs.
• Dogs (Low Growth, Low Share): Low market share in
slow-growth industries; candidates for divestiture,
liquidation, or repositioning.

7.

Key Formula
X-axis
If RMS > 1
If RMS < 1
Y-axis
Indicates how fast the market is growing.
High growth = attractive market (> 10%)
Low growth = mature or declining market (< 10%)

8.

Key Formula
Relative Market Share = Your
X-axis
Sales*100%
Market Growth Rate = (Market
Size Year 2 - Market Size Year 1)/ Y-axis
Market Size Year 1*100%

9.

PRACTICE
• calculate growth rates;
• calculate relative market share;
• identify market leaders;
• classify products; and
• make strategic decisions.

10.

REFLECTION
• Which part of the BCG analysis did you find
most interesting or useful?
• Did
completing
the
calculations
and
classifications help you understand business
strategy better? How?
• How might you apply the idea of the BCG
matrix in your own life or in future work?