Answer to Question #154942 in Management for Nish

Question

Explain the purpose of using the BCG matrix.

Answer 1

BCG matrix, also referred to as Boston or growth-share, was created by Boston Consulting Group that was developed to provide strategic analysis of the product regarding its growth and the relative share of the market.

Most companies have developed the BCG matrix to gather and acquire insights into a type of product that will help them capitalize on the market share growth benefits accompanied with a competitive advantage.

BCG matrix focuses on the current profits of a product, but it helps in the evaluation of increased profitability that a product can give a company in the future. Therefore the BCG matrix analyses both the present and focused future competitive environment of their company with a SMART plan.