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What is the importance of the BCG Matrix?   


Kelly Jackson
@Kelly.Jackson · Posted 30 Mar. 2022


Jane Martin
@Jane.Martin · Updated 30 Mar. 2022

BCG matrix is used to assess the performance of a product portfolio and to understand the factors contributing to its performance as well as the most valuable drivers. The BCG Matrix is a key tool in the strategy consulting exercise. It is a simple tool that is used to identify key drivers and their impact on the performance of a product portfolio. It can be used to analyze the performance of the business model case study. The Boston Consulting Group (BCG) developed the growth-share matrix to help companies determine where to invest their resources. In the growth-share matrix, a company's products are categorized according to how fast they are growing and how much market share they have. Using this information, a company can decide which products should be given more attention. The matrix is used to identify the most profitable and fastest-growing products within a portfolio of products. A second purpose of the growth-share matrix is to assess the strategic position of a company's business relative to its competitors.  


Jack Penn
@Jack.Penn · Updated 30 Mar. 2022

The Boston Consulting Group (BCG) developed the BCG Matrix as a simple and efficient way to categorize companies by their market share and growth potential.  It is a useful tool for visualizing the structure of an industry and identifying market leaders, innovators, challengers, and laggards. It can also be used to see how different companies in the same market compare to each other.  

  • The role of the BCG matrix in business strategy - Due to its simplicity, the BCG matrix is used in many business settings as a strategy tool. For example, some investment firms use it to classify their holdings based on risk versus return potential.  

  • Using the BCG Matrix to analyze competitors - The BCG matrix is used to determine where a company stands in its market. It can also be used to see how different companies in the same market compare to each other.  


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