Bcg - What Are Bcgs

QUESTION 1

What is a BCG?

A BCG is simply a tool which is used to measure the attractiveness of the SBU’s (Strategic Business Unit) market or industry, as well as the SBU’s strength because of its positioning. It was created by Bruce D. Henderson for the Boston Consulting Group in 1970 to help corporations to analyze their business units. It is a comparative analysis of business potential and the evaluation of environment. The BCG Matrix comprises of four cells each of which are:

1. Stars

2. Cash Cows

3. Question Mark or Problem Children

4. Dogs

Stars

This has a high market share in a high growing industry. Growth will eventually slow down and they will become cash cows.

Cash Cows

These are low on attractiveness but high on strength. They require less investment as they produce a lot of profit. A company should not invest much into a cash cow because the industry cycle is as its end but it is still a practical product while the profits last.

Question Mark or Problem Children

These are products growing rapidly in a fast growing industry. They are high in attractiveness but low in strength. They require high investment to maintain and grow their market share. Some of these may grow into stars or my even be discontinued depending on their growth rate or potential.

Dogs

These are low in attractiveness and low in strength. They only generate enough cash to maintain themselves but not enough profits. At this point there is no room for growth therefore management may choose to discontinue this product.

QUESTION 2

The company in which I have chosen is Apple Inc. Apple is a very successful company and renowned worldwide for its product innovation and heavy investment in its research and development department due to which apple is a pioneer and market leader in its field. The particular products which we will look at are iPads, iPods & iPhones, Mac Software and the Apple TV.

STARS | QUESTION MARKS |

CASH COW | DOGS |

Product...