What advantages and disadvantages of BCG matrix?

Answer 1

The BCG matrix is a popular business tool that helps companies analyze their product portfolio and make strategic decisions. The matrix categorizes products into four categories: Stars, Cash Cows, Question Marks, and Dogs, based on their market share and market growth rate. Each category has its own advantages and disadvantages:

Advantages of BCG matrix:

1. Provides a clear picture of the company's product portfolio: The matrix helps companies understand their product mix and identify which products are profitable and which ones are not.

2. Helps in resource allocation: The matrix helps companies determine how to allocate resources to different products, based on their growth potential and profitability.

3. Easy to understand: The BCG matrix is a simple and easy-to-understand tool that does not require specialized training to use.

Disadvantages of BCG matrix:

1. Limited perspective: The BCG matrix only considers two factors – market share and market growth – and does not take into account other important factors such as the competitive landscape or technological advancements.

2. Oversimplification: The matrix oversimplifies the complexities of the business environment, and may not be applicable to all industries.

3. Focuses on the short term: The matrix focuses on short-term profitability, and does not consider the long-term potential of a product.

In conclusion, the BCG matrix is a useful tool for companies to analyze their product portfolio and make strategic decisions. However, it should be used in conjunction with other business tools and strategies to ensure a comprehensive and accurate analysis of the business environment.

By : 1solutions.biz

Answer 2

-a guide for the formulation of global business strategy

-a guide for the formulation of global marketing objectives

- Visual/graphical representation

-a global view for international business competitive structure