What is BCG Matrix
The Boston Consulting Group’s matrix (BCG matrix) of a Product is designed to help with long-term strategic planning, to help a business growth opportunities by reviewing products along with competitors. It also helps to decide where to invest, where to discontinue or where develop products. It's also known as the Growth-share Matrix.To easily visualize the brand positioning MedAnalytics created a 2 dimensional 4 quadrants chart of BCG matrix (Growth-Share matrix) which is showing vertical axis is brand’s growth rate and the horizontal axis is brand’s relative market share.
Brands are shown as bubbles. Different company’s brands can be compared from the graph. Each of the bubble has following three characters:
The size of the bubble depends proportionally to its unit sales volume. The more the market share, the larger the size of the bubble.
The position of bubbles from right towards left, indicates competitiveness by the market share from lower to higher, which is related to revenue earn.
The position downwards to upwards from the baseline indicates growth rate from low to high, which is related to expenditure.
According to this graph, the brand position could be identified by their growth rate and relative market share.
The Growth-Share Matrix (BCG Matrix) is divided into 4 quadrants by the green and red lines inside the graph which across each other to form the quadrants. These quadrants derived on market growth and relative market share, as shown in the diagram below-
Products in high growth market with low market share. (Upper Right Quadrant)
Products in high growth market with high market share. (Upper Left Quadrant)
Products in low growth market with high market share (Lower Left Quadrant)
Products in low growth market with low market share. (Lower Right Quadrant)
To learn how to use the BCG Matrix for decision making, please read the next article: How to use BCG Matrix.