PORTFOLIO MATRIX (PM) (By Bostom Consulting Groups (BCG) of America)

PORTFOLIO MATRIX (PM)
(By Bostom Consulting Groups (BCG) of America)


G
R
O High
W
T
H

R
A Low
T
E

High Low

COMPETITIVE POSITION
(Market Share)


The Portfolio Matrix was developed by America’s General Electronics (GE) Cos’ “BOSTON CONSULTING GROUP”. So, it is also called as “BCG Matrix”. A simplified version of the matrix shows the link between the Growth Rate of the business and the Competitive Position (Market Share) of the firm.

Businesses in the “Star” section are having the high growth rate with strong competitive position represents those businesses, which have opportunities for growth and profit.

Business in the “Question Mark” section, with weak market share and a high growth rate, usually require cash investment to go to the “Star” section.

The “Cash Cows” are, with strong competitive positions, which are usually well established in the market, and such firms are in the position of making products at low cost. Therefore, products of those firms can provide cash required for their operations.

The “Dogs” are the businesses with a low growth rate and having weak market share. Those businesses are usually not profitable and generally should be disposed off.