Question

How does the BCG Matrix classify products?

Answer 1

The BCG Matrix is a tool used in business to classify products based on their market growth rate and market share. It helps companies identify which products have the highest potential and which ones may require strategic decisions.

Step-by-step explanation:

The BCG Matrix is a tool used in business to classify products based on their market growth rate and market share. It helps companies identify which products have the highest potential and which ones may require strategic decisions. The matrix consists of four quadrants: Stars, Cash Cows, Question Marks, and Dogs.

• Stars: Products with high market share in a high-growth market. These products generate substantial revenue and require continuous investment to maintain their growth.
• Cash Cows: Products with high market share in low-growth markets. These products are considered to be cash generators and require minimal investment.
• Question Marks: Products with low market share in high-growth markets. These products have the potential to become stars but require significant investment to increase their market share.
• Dogs: Products with low market share in low-growth markets. These products have limited potential and are often phased out or divested.

Answer 2

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential. It classifies business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share