Bcg Matrix Of Microsoft Company Information How To Effectively Use The matrix ignores small competitors that have fast growing market shares. This can tempt management to divest too early, or to over-emphasise a particular product.Ī company with low market share can be profitable. It ignores the effects of synergies -Dog products can often earn more cash as cash cows -The matrix only uses two dimensions market share and growth rate. Limitations of using the BCG Matrix: -High market share is only one of many success factors neither is market growth the only indicator of market attractiveness. If a business can use the experience curve to its advantage, then it can manufacture and sell new products at a low price that can allow it to get early market share leadership.

Provides as a base for management to decide which products to keep, invest in and to get rid of. It is applicable to companies that seek volume and experience effects. Question marks should be frequently analysed to decide whether they are worth staying in the market.Īdvantages of using the BCG Matrix: -It is helpful for managers to evaluate the companys product line, and the balance in their portfolio of stars, dogs, cash cows and question marks. These products tend to grow fast, but can consume large amounts of resources. Question mark products are located in the upper right quadrant of the matrix. Stars would eventually become cash cows if they remain a market leader, and if the markets growth rate declines. These generate high income but tend to cost the company large amounts of cash. The values of these products are not difficult to calculate due to the fact that their cash flow patterns are predictable. These products are often cash generators that create higher returns than the market growths rate, and tend to sustain themselves well from a cash flow perspective. This means that they are candidates for divesture.Ĭash cows, located in the lower left quadrant, are generally leading products in mature markets. Products that are in high growth markets but do not maintain large market share are known as question marks.Ĭharacteristics of Each Quadrant -Dogs, located in the lower right hand quadrant on the grid, do not generate much money as they have low market share and little to no growth. Star products are ones that are in high growth markets, take up a large portion of market share, and should be invested in even more. Products that have a large market share but are in low growth areas are known as cash cows, meaning that a company should keep it on the market for as long as they can. Bcg Matrix Of Microsoft Company Information How To Effectively Use.

Microsoft bcg matrix