Boston Consulting Group (BCG) Analysis

The BCG Analysis, developed by the Boston Consulting Group, comes across diverse divisions of a business unit on a portfolio basis through the lenses of market development and cash making. BCG shaped a matrix based on an understanding of growth development and cash making as defined below in a pictorial manner.

As Per The Matrix, Business Segments Can Be Segregated As:

Stars:

These are divisions in a business where the market is increasing swiftly, and the company has a huge market share—this division created growing cash for the business over time. Cera Sanitary ware could be an excellent example of a "star" with a large market share, continuous development, and noteworthy cash making.

Cash Cows:

These are divisions that entail a low cash mixture for investment to uphold market shares because of insufficient development forecast but at the same time progressively create cash for the company from the recognized market share. Navneet Publications, which is into the business of books and notebooks, could be a good example of a "cash cow." The industry grows at an unsurprising and stable rate each year. With a strong brand name, well-penetrated distribution channel, ready market, and strong balance sheet, the company need to change the content every time some syllabus changes and obtain the benefits in the form of steady cash flows. Close-up is another example of the cash cow.

Question Marks:

Business divisions in a fast-mounting market with low market share. The right approach and investments can help the business's market share grow, but they also run the risk of consuming cash in the course of growing market share and, in the end, not generating enough cash. Tata Nano can be considered an example of a question mark that did not succeed, whereas Bajaj Pulsar may be measured as an example of a question mark product that succeeded.

Dogs:

Business divisions, which have slow growth rates and severe competitive dynamics that lead to low cash generation, are branded as Dogs.BCG matrix provides an attractive sense of the businesses/segments in terms of their attractiveness to the investors.