BCG Matrix Explained- Product Fitment(Neelkamal Chair)
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Transcript of BCG Matrix Explained- Product Fitment(Neelkamal Chair)
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BCG Matrix Explained- Product
Fitment(Neelkamal Chair)
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Project Goals
The goal of the project is to understand the BCG(BostonConsulting Group) Matrix and fitment of the specifiedproduct- Neelkamal Chair into the Matrix.
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Origin and Theory- BCG Matrix
In the 1970s, BCG created and popularized the BCG( Boston Consulting Group)Matrix, also known as the "growth-share matrix", a simple chart to assist largecorporations in deciding how to allocate cash among their business units. Thecorporation would categorize its business units as "Stars", "Cash Cows", "QuestionMarks", and "Dogs", and then allocate cash accordingly, moving money from "cashcows" toward "stars" and "question marks" that had higher market growth rates, and
hence higher upside potential.
It is based on the product life cycle theory that determines what priorities should begiven in the product portfolio of a business unit. To ensure long-term value creation,a company should have a portfolio of products that contains both high growthproducts in need of cash inputs and low growth products that generate a lot of cash.
It has 2 dimensions- market share and market growth. The basic idea behind it is thatthe bigger the market share a product has or the faster the products market grows,
the better it is for the company.
The chart was popular for two decades and "continues to be used as a primer in theprinciples of portfolio management," as BCG says.
http://en.wikipedia.org/wiki/1970shttp://en.wikipedia.org/wiki/Growth-share_matrixhttp://en.wikipedia.org/wiki/Growth-share_matrixhttp://en.wikipedia.org/wiki/Growth-share_matrixhttp://en.wikipedia.org/wiki/Growth-share_matrixhttp://en.wikipedia.org/wiki/1970s -
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BCG Matrix
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The BCG Matrix Method
This method can help understand a frequently made strategy mistake: having a one-size-fits-all-approach strategy, such as a generic growth target( 9% per year) or ageneric return on capital of say, 9.5% for an entire corporation.
In such a scenario:
1. Cash Cows Business Units will beat their profit target easily; their management havean easy job and are often praised anyhow. Even worst, they are often allowed toreinvest substantial cash amounts in their businesses which are mature and notgrowing anymore.
2. Dogs Business Units fight an impossible battle and, even worse, investments aremade now and then inhopeless attempts to turn the business around.
3. As a result (all) Question Marks and Stars Business Units get mediocre sizeinvestment funds. In this way they are unable to ever become cash cows.
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Competitive Analysis, Cont.
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Technology
New technology being used
Benefits
Standards being adopted
Benefits
Standards specifically being ignored
Drawbacks & benefits
DYA: define your acronyms!
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Team/Resources
State assumptions about resourcesallocated to this project
People
Equipment
Locations
Support & outside services
Manufacturing
Sales
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Procedures
Highlight any procedural differencesfrom regular projects of this type
Discuss requirements, benefits, andissues of using new procedures
FOR MORE INFO...
List location or contact for procedures document (or otherrelated documents) here
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Schedule
Review high-level schedulemilestones here
FOR MORE INFO...
List location or contact for detailed schedule (or other relateddocuments) here
Jan Feb Mar Apr May Jun July Sep Oct Nov Dec
Phase 1
Phase 2
Phase 3
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Current Status
High-level overview of progressagainst schedule
On-track in what areas
Behind in what areas
Ahead in what areas
Unexpected delays or issues
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