The BCG Matrix plots business units or product offerings along two axis, the first is market growth, and the second is market share. BCG matrix is used to assess Profiles of products/businesses, the cash demands of products, the development cycles of products and Resource allocation and divestment decisions.įirms can use this 2 x 2 matrix as an investigative tool in portfolio analysis, strategic management, product management, and brand marketing. The main objective of the BCG Matrix is to decide investment priorities for a company with a portfolio of products/BUs. The BCG matrix places each product a company offers according to the growth rate of the business and the relative market share the product controls. Product life cycle is based on the observation that products develop, similar to animals, through distinct phases of maturity that differ in amount of resources required and produced. The Boston Consulting Group established a tool, called the BCG matrix, to categorize a firm’s products in relation to the overall product life cycle. In this method, businesses or products are categorised as low or high performers depending upon their market growth rate and relative market share. BCG matrix is developed by Bruce Henderson of the Boston consulting group in the beginning of 1970’s.
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