How does the BCG Growth-Share Matrix correlate to the growth category of each product?

The BCG Growth-Share Matrix correlates to the growth category of each product by plotting them on a matrix according to their relative market share and market growth rate. The matrix divides the products into four quadrants, each representing a different growth category. The position of a product on the matrix helps determine how it should be considered in terms of investment and development.

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Growth Strategy Toolbox

Has your business growth reached a plateau? Use our Growth Strategy Toolbox to test, execute, and share new growth strategies across the team. Compani...

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Developed by Boston Consulting Group, the BCG Growth-Share Matrix is a visualization tool that plots a company's multiple product lines along with their relative market share and against their market growth rate. This matrix visualization plots the product lines into four quadrants according to their relevant market growth rate and relative market share. Each icon on the matrix correlates to a "growth category" to determine how each product should be considered.

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The BCG Growth-Share Matrix can be used to analyze the competitive landscape by plotting a company's multiple product lines along with their relative market share and against their market growth rate. This allows a company to visualize and understand the performance of its different product lines in relation to each other and the market. It can help identify which products are performing well, which are not, and where there may be opportunities for growth or need for divestment.

The potential risks associated with the use of the BCG Growth-Share Matrix include the oversimplification of reality as it only considers market growth rate and relative market share, ignoring other important factors. It also assumes market attractiveness is solely determined by market growth rate and relative market share, which may not always be the case. Additionally, it can lead to unbalanced portfolios if it's followed without considering other factors.

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