Strategies

The BCG matrix is a graphic model of evaluation of portfolio of products developed by the Boston Consulting Group in the 1970s. This abbreviation BCG given to it. It is a model which aims to assess the strengths and weaknesses of the portfolio of products that the Organization has in its link with the target market which aims to cater. The matrix as such is summarized graphically in the following scheme: where converge 4 possible scenarios: market high rate of growth of market share high: star product is the most important product of the portfolio of the company. It’s a product whose acceptance is high in a market with an internal rate of growth also high. Their high levels of sales to facilitate the implementation of a production economy to scale, as a result, costs should decrease gradually as product increase your participation fee and that the market will expand. Proportionately increased demand could enable that prices remained stable for a certain time, and could even be subject to increase in those who are not highly imitable by competition. Ello guarantees the rate of return on investment and a progressive increase in profitability and the profits achieved by the product.

In this quadrant the Organization should consider the expansion of the product, the extension of the line and the beginning of the process of differentiation of the offer. It would be desirable to also implement an aggressive Marketing strategy. The task of strategists is to maintain and monitor closely the performance of the mentioned variables; as well as perform the necessary updates in the product to maintain their participation. In this point is should not lose sight to competition, since a decline in the relative participation would transform the unknown star product directly. Market low rate of growth of the market share high: product question or problem: is a product which, despite being with a rapidly growing market demand has failed to meet the standards expected by consumers and offered by competitors.

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