Recognized that these types of products will become a star or whether it willĭrop into the Dogs quadrant.
Operate with a low market share but with a high-growth market. Question marks are also known as ‘adopted children’ and Cash cows will eventually move to the Dogs quadrant. Cash cows can be seen in the lower left quadrant of the BCG matrix. Cash cow scenarios can be seen in mature markets, considered as boring and settled.
These products generate an income that exceeds the cost of the product. same as that, the organization should earn profit as much as possible using the product in the existing market share without discontinuing the product and with a little investment. The idea behind this concept is to milk these products as much as possible without killing the cow. The products that have slow- growth but with a large market share currently are the Cash cow products. Due to the low market share and the slow growth, Dogs can be turned in to cash traps which can tie up the organization’s funds for a long period without any use or profit. Dogs can be found in the lower right quadrant in the BCG Matrix. These can adversely affect the organization’s return on asset ratio as well.
The break-even of these products is barely generating sufficient cash to maintain the market share of the product.Įven though there are social benefits of maintaining the product, in the accounting perspective, maintaining such a product has adverse effects on the organization as it is not generating any profit for the organization. Due to the slow rate of growth, these products are considered as the ones that should be liquidated, sold or re positioned. There are four elements in the BCG Matrix.ĭogs or Pets in an organization’s product line are the products that have a low market share in mature, slow-growing business industry. It is a widely used marketing tool in the modern business world. Boston Consulting Group used the BCG matrix to decide on the resource allocation for their product line.īCG Matrix can be used as an analytical tool in strategic management, Product management, Marketing as well as portfolio analysis. They used this BCG Matrix in analyzing their product line and in strategic planning. Henderson in 1970 as a help to Boston Consulting Group. This analyzing tool was created by Bruce D. This helps organizations to analyze their product portfolio and decide what product should be discontinued, on what product the organization should invest more and what product needs to be developed. BCG Matrix or the Boston Consulting group’s product portfolio matrix is a tool designed to use in long term strategic planning.
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