An example of a simple bkg matrix. Fundamentals of the application of the matrix method of the Boston Advisory Group on the example of the company "empire bags"

With this example of a company's BCG matrix, you can easily improve your company's product portfolio. The example contains detailed description each step in the construction of the BCG matrix, a template for constructing the BCG matrix in Excel and advice on the likely conclusions that should be made as a result of the analysis of the BCG matrix.

Fig.1 BCG matrix

Theoretical background

Before exploring the example of the BCG matrix, we advise you to read the detailed article “The Boston Consulting Group Matrix: detailed overview» with a description of the main characteristics and mechanisms of the BCG matrix, with tips on compiling an impeccable satchel and interpreting the results.

1st step: Gathering initial information

Collect data on sales and profits of the analyzed groups in a single table.

2nd step: Calculate the market growth rate

Calculate the weighted average market growth rate for each product group. If it is not probable to calculate the weighted average market growth rate, it is allowed to introduce a simple market share into the model.

In accordance with the obtained data, determine the market growth rate for each product in the analysis:

• if the growth rate is less than 10% - "small"
• if the market growth rate is more than 10% - “highest”

3rd step: Calculate the market share of the product

Calculate the relative market share of each product. In accordance with the obtained data, determine for each product whether the relative market share is “low” or “highest”.

• if the value of the relative market share is less than 1 - "low"
• if the value of the relative market share is greater than 1 - "highest"

If it is unrealistic to calculate the relative market share due to lack of information, it is allowed to use a lightweight version:

• if, according to your expert assessment, the share of your product is less than the share of the main rival - put "0"
• if, according to your expert assessment, the share of your product is greater than the share of the main rival - put "1"

4th step: An example of building a BCG matrix by sales volume

Now, knowing the relative market share of the product and the market growth rate, you can find for each product in the company's backpack its place in the BCG matrix.

Based on the resulting information, build a BCG matrix, reflecting in each cell the name of the product, sales volume and total sales per group.

Analysis by sales volume allows you to judge how the company's portfolio is balanced, helps to correctly place the values ​​​​for product development and highlight the main lines of business.

5th step: An example of building a BCG matrix by profit

Build a similar BCG matrix for profit, reflecting in each cell the name of the product, the amount of profit and the total profit per group.

Profit analysis allows you to judge the ability to invest and support new products of the company, helps to set the values ​​in the support of product groups.

6th step: Analysis, conclusions and strategy development

Analyze the resulting BCG matrices in terms of sales and profits, write conclusions and determine the company's backpack development strategy.

The main conclusions should outline: (For detailed strategies for the development of groups on the BCG matrix, see the article: BCG Matrix. Bases)

• Is the briefcase balanced or are there obvious differences from a flawless knapsack?
• which product groups should be developed, which product groups should be reduced?
• values ​​in the development of the company's product range?
• is it possible to profit from ongoing projects provide support for new products?
• Does the company have enough products that can provide future foreign exchange earnings?
• what strategy in the development of each product group should be followed to maximize future income?
• Is it worth adding some additional products to the assortment?

Ready solutions

We have ready template, with which you can easily apply the theoretical knowledge of this article in practice. You can download a template for building a BCG matrix in Excel format in the "Useful Marketing Templates" section.

Ministry of Agrarian and Food Policy of Ukraine

Kharkiv National Agrarian University

Named after V.V. Dokuchaev

INDZ on the topic : "Analysis of the position of the goods on the market for additional matrices BKG"

Vikonav: 4th year student, 3rd group

Faculty: Management and Economics

Specialty: "Management of organizations"

Shulzhenko Yu.A.

Revised by: Yulia Volodymyrivna

Kharkiv 2012

BCG matrix 1

1.1Scope 2

1.2 Description 3

BCG matrix

Brownleft arrow- typical product life cycle, black arrows - typical investment flows

BKG matrix(English) BCG matrix) is a tool for strategic analysis and planning in marketing. Created by Bruce D. Hendersen, founder of the Boston Consulting Group, to analyze the relevance of the company's products based on their position in the market relative to the growth of the market for these products and the market share occupied by the company selected for analysis.

This tool is theoretically justified. It is based on two concepts: product life cycle* and economies of scale* or learning curve.

The axes of the matrix show market growth (vertical axis) and market share (horizontal axis). The combination of estimates of these two indicators makes it possible to classify the product, highlighting four possible roles of the product for the company that produces or sells it.

1.1 Scope

The BCG matrix can be used in the process of strategic analysis and planning of the product program (product range), allows you to correctly allocate resources between the available products. Re-building the BCG matrix after a certain period of time can be useful in the controlling process.

1.2 Description

At the core Boston Matrix There is a product life cycle model, according to which a product goes through four stages in its development: access to the market(product-"problem"), growth(product-"star"), maturity(product - "cash cow") and recession(product-"dog"). The BCG matrix is ​​a graphical representation of the position of a particular type of business in the strategic space "growth rate / market share".

* Product life cycle- the period of time during which the product circulates on the market, starting from the moment it enters the market market and ending with its withdrawal from the market. One of the fundamental concepts of the concept of modern marketing.

Graphs characterizing the change in indicators in various phases of the life cycle. 1-Phase of entering the market;

3-maturity;

4- Decline: A - sales;

B - profit.

Various options for the product life cycle curve: 2 - repeated cycle;

3 - "comb" curve

According to the marketing concept, any product goes through a life cycle, that is, there is a certain period of time when it is present on the market. In a typical life cycle goods are divided into four phases, four stages:

1. Bringing the product to market. First appearance of the product on the market. Characteristic is a small increase in sales volumes and, accordingly, profit is minimal or non-existent.

2.Growth. A period of rapid growth in sales if the product is accepted by the market and demand grows on it. Profits also increase as sales increase.

3.Maturity. Sales volumes are significant, but further sales growth is not observed. Profit at this stage has stabilized, since additional costs are not required to bring the product to the market.

4.decline, withdrawal from the market. This phase of the product life cycle is characterized by a significant decrease in sales volumes up to a complete drop in demand for this product. Profits plummet to zero.

Scale effect* is associated with a change in the cost of a unit of output, depending on the scale of its production by the firm. considered in the long term. Reducing the cost per unit of output with the consolidation of production is called economies of scale. The type of the long-run cost curve is associated with the effect of scale in production.

Classifications of types of strategic business units:

"Stars"

High sales growth and high market share. Market share must be maintained and increased. "Stars" bring a very large income. But, despite the attractiveness of this product, its net cash flow is quite low, as it requires significant investment to ensure a high growth rate.

"Cash Cows" ("Money Bags")

High market share but low sales volume growth. "Cash cows" must be protected and controlled as much as possible. Their attractiveness is explained by the fact that they do not require additional investments and at the same time provide a good cash income. Proceeds from sales can be directed to the development of "Difficult Children" and to support the "Stars".

"Dogs" ("Lame Ducks", "Dead Weight")

The growth rate is low, the market share is low, the product usually has a low level of profitability and requires a lot of attention from the manager. Get rid of dogs.

"Difficult Children" ("Wild Cats", "Dark Horses", "Question Marks")

Low market share, but high growth rates. Difficult children need to be studied. In the future, they can become both stars and dogs. If there is a possibility of transferring to the stars, then you need to invest, otherwise, get rid of it.

Flaws

Strong simplification of the situation;

The model takes into account only two factors, but high relative market share is not the only success factor, and high growth rates are not the only indicator of market attractiveness;

Lack of consideration of the financial aspect, the removal of dogs can lead to an increase in the cost of cows and stars, as well as negatively affect the loyalty of customers using this product;

The assumption that market share corresponds to profit, this rule may be violated when a new product is introduced to the market with large investment costs;

The assumption that the market decline is caused by the end of the product's life cycle. There are other situations in the market, for example, the end of the rush demand or the economic crisis.

Advantages

theoretical study of the relationship between financial receipts and the analyzed parameters;

objectivity of the analyzed parameters (relative market share and market growth rate);

clarity of the results obtained and ease of construction;

it allows you to combine portfolio analysis with a product life cycle model;

simple and easy to understand;

it is easy to develop a strategy for business units and an investment policy.

Construction rules

The horizontal axis corresponds to the relative market share, coordinate space from 0 to 1 in the middle with a step of 0.1 and further from 1 to 10 with a step of 1. Market share estimation is the result of the analysis of sales of all industry participants. Relative market share is calculated as the ratio of own sales to sales of the strongest competitor or the top three competitors, depending on the degree of concentration in a particular market. 1 means that own sales are equal to sales of the strongest competitor.

The vertical axis corresponds to the growth rate of the market. The coordinate space is determined by the growth rates of all company products from maximum to minimum, the minimum value can be negative if the growth rate is negative.

For each product, the intersection of the vertical and horizontal axes is set and a circle is drawn, the area of ​​which corresponds to the share of the product in the company's sales.

BCG matrix helps to perform two functions: making decisions about the intended positions in the market and the distribution of strategic funds between different areas of management in the future.

Among the advantages of the BCG matrix as a tool strategic management First of all, it is worth noting its simplicity. The matrix is ​​very useful in choosing between different SBAs, determining strategic positions, and in allocating resources in the short term. However, due to its simplicity, the BCG matrix has two significant drawbacks:

all SZH, the position in which the company is analyzed using the BCG matrix, should be in the same phase of life cycle development;

within SZH, competition should proceed in such a way that the indicators used are sufficient to determine the strength of the company's competitive position.

If the first flaw is fatal, i.e. SBAs that are at different stages of the life cycle cannot be analyzed using this matrix, then the second drawback can be eliminated. In the process of improving the BCG matrix, the authors proposed completely different indicators. The main ones are presented in table 2.

Table 2. Indicators of assessing the strategic position using the BCG matrix.

The indicator of the company's future competitiveness in the market is determined by the ratio of the expected return on capital and the optimal (or basic) return on capital. In fact, this is the projected return on equity of the company or an analysis of the trend in this indicator in recent years. In the general case, the attractiveness of SZH can be calculated based on the ratio:

SZH attractiveness = aG + bP + cO - dT,

where a, b, c and d are the coefficients of the relative contribution of each factor (they add up to 1.0), G are the prospects for market growth, P are the prospects for profitability in the market, O are positive environmental impacts, T are negative environmental impacts side of the environment.

As an example, consider a representation using the BCG matrix strategic positions Randy's hypothetical organization in a number of business areas in the tea market. A study of the organization's business showed that it actually competes in 10 areas of the tea market (Table 1).

Table 1. Characteristics of Randy's business areas in the tea market

The BCG model for the considered business areas of the Randy organization is as follows (Fig. 3).

Rice. 3. BCG matrix of Randy's businesses in the tea market

The most cursory look at the resulting model suggests that Randy's organization attaches undeserved importance to such a business area as "U.S. private label tea." This area is classified as "dogs" and although the growth rate of this market segment is quite high (12%), Randy has a very strong competitor in the form of Cheapco, whose market share in this market is 1.4 times larger. Therefore, the rate of profit in this area will not be high. If with regard to the future of such a business area as "U.S. private label tea", one can still think about whether to continue to invest here to maintain its market share or not, then in relation to "varietal tea from Europe", "varietal tea from Canada" and "varietal tea from the USA" everything turns out to be very clear. We need to get rid of this kind of business and as soon as possible. The investments that Randy's organization makes to maintain this business do not lead to an increase in market share or an increase in profits. In addition, the market for these types of tea itself shows a clear trend towards fading. It is clear that Randy's organization is clearly oblivious to the prospects associated with the development of the US fruit tea and US herbal tea market. These areas of business are clear "stars". Investments in the development of a share in this market in the near future may result in significant income.

Building the BCG matrix (BCG) in practice

Need to develop strategy firm regarding its product portfolio, using the technique BCG. To do this, it is necessary to calculate the current indicators of the methodology, build BCG matrix, identify strategically unattractive products and exclude them from the output, and then, after recalculating the indicators, build new BCG matrix.

Let's produce calculation indicators of the BCG matrix. Calculate the indicator market growth (RR). This indicator characterizes the movement of goods on the market, which is expressed through the change in the volume of sales (sales) of this product (the result of this business process) for the last considered period of time (in a simplified version, the ratio of sales for the last period to the penultimate one). Consequently,

РР1=564.96/256.8=2.2;

PP2=124.4/124.41=0.99992;

РР3=132.95/133.98=0.992312;

РР4=115.0/116.44=0.987633;

РР5=1001.52/256.8=3.9;

PP6=75.18/175.45=0.428498;

PP7=122.99/67.48=1.822614;

PP8=350.92/87.73=4;

PP9=47.69/73.37=0.649993.

Calculate the indicator Relative market share (RMO). This parameter is determined by the ratio of the company's market share to the share of the leading competing company, and the company's market share is found as the ratio of sales volume to the market capacity of this product. ODR 1 \u003d 8 / 32 \u003d 0.25; ODR 2 =50/50=1; ODR 3 =62/31=2; ODR 4 = 57/43 = 1.32558; ODR 5 =2/14=0.14286; ODR 6 =7/6=1.16667; ODR 7 =12/88=0.13636; ODR 8 =6/7=0.85714; ODR 9 \u003d 16 / 32 \u003d 0.5.

The diameter of the circle, expressed in relative units (the sales volume of one of the goods is taken as a unit), is selected in proportion to the share of the production volume in the sales volume (it is necessary that the matrix can be "worked", so you need to be careful when choosing a standard).

Let us correlate the resulting diagram with the BCG matrix. The boundaries of the matrix quadrants are shown here by arrows. Each product (product numbers are marked with numbers) manufactured by the company corresponds to its own quadrant of the BCG matrix. So,

Of the goods produced by the company (as follows from the description of the BCG matrix areas), only the Behemoth Cat toy, which belongs to the Cash Cows area (on the border with the Stars area), brings a steady profit. When compiling a new product portfolio of a company, one should focus on the most promising products. However, in this case it turns out that most of The company's products belong to the field "Wild Cats" or "Dogs". Products classified as "Wild Cats" are undoubtedly promising, as they are in rapidly growing markets, but their promotion requires a large financial outlay from the company. In this case, only one product "Behemoth Cat" provides a steady inflow of funds, the profit from the sale of which cannot cover such a number of deployed projects classified as "Wild Cats".

In addition, the company's portfolio includes four commodities classified as "Dogs". Typically, such products do not bring significant profits and their release is justified only within a dedicated market in the absence of serious risks, in the global market, or in the case when the release of this product gives the company additional competitive advantages. In this case, we are working in a simplified situation, so we will assume that the goods classified as “Dogs” are not profitable for the company. In a real situation, it would be necessary to study the detailed information for each product in more detail.

So, we believe that the “Dogs” of the company are not profitable, therefore, the company can exclude them from its product portfolio. The four "Wild Cats" require a very large inflow of funds, therefore, it is not profitable for the company to release all these products at the same time. It would be wise to single out one or two products (the most promising for the company) and invest in them all the funds that will be freed from the discontinuation of "Dogs" and additional "Wild Cats".

Since we are working in a simplified situation, we will choose one product that is the most promising for the company. In this case, products 5 (Dolmatian toy) and 8 (Elephant toy) are the most promising. Product 5 has the largest share in the total sales of the company, product 8, having the same level of the PP indicator as the 5th product, while having the highest level of the ODR indicator among the Wild Cats. Let's choose product 8, which has "advanced" the most towards the "Stars" region of the BCG matrix.

1. According to the sales indicator (V sales) of the 8th product, we calculate the total V market for this product = (old sales indicator (V sales)) / (market share of the company for this product) 100 \u003d 350.92 / 6 100 \u003d 5848.67.

2. For products 1, 2, 4, 5, 6, 7, 9, which are withdrawn from the market, we calculate the total amount intended for redistribution = S (V sales) (cost coverage) = 282.48 + 52.248 + 37, 95+701.064+24.058+73.794+25.753=1197.346.

3. Increase in sales (realizations)=1197.346/(coverage of product 8 costs)=1596.461.

4. New market V=(old market V)+1596.461=5848.67+1596.461=7445.13.

5. New sales V = (old sales (V sales) of product 8) + (sales growth) = 350.92 + 1596.461 = 1947.381.

6. New market share of the firm = (new sales V)/(new market V)=1947.381/7445.13=0.262.

7. V sales of the main competitor \u003d (old V market) (market share of the main competitor) \u003d 5848.67 0.07 \u003d 409.41.

8. New market share of the main competitor \u003d (V sales of the main competitor) / (new V market) \u003d 409.41 / 7445.13 \u003d 0.055.

9. New ODR \u003d (new market share of the company) / (new market share of the main competitor) \u003d 0.262 / 0.055 \u003d 4.76.

10. New PP \u003d (new V sales) / (sales of the product for the last year 2002) \u003d 1947.381 / 87.73 \u003d 22.197.

So, new product portfolio will be

On practice usually it is necessary to revise various options for action, the enumeration of which allows you to develop an optimal strategy for the development of the company's product profile.

Obtained as a result of analysis by the BCG method product strategy turns out to be very attractive, as it allows turning one of the products from the “Wild Cat” into the undeniable “Star” due to the removal from production of not very promising products. Such strategic move will allow the company to gain a strong position in the market of children's products and possibly obtain the necessary funds for the promotion of new (at this stage rejected) products, but this is already a matter of future development of strategic lines. However, it should be noted that in practice it is required to treat the obtained results with caution and to check them multiple times, considering various options future strategy (to avoid missed opportunities).

Calculation of the annual market growth rate and relative market share. Building a matrix of the Boston Consulting Group, its strategy. Measures to form a balanced portfolio. SWOT analysis of the company. Assessment of the degree of influence of intra-industry competition.

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BCG matrix (construction example)

1. Collection of initial data

Graphically, the BCG matrix represents two axes and four square sectors enclosed between them. Consider the phased construction of the BCG matrix: 1. Collection of initial data. The first step is to make a list of those products, divisions or companies that will be analyzed using the BCG matrix.

2. Calculation of the market growth rate for the year

At this stage, you need to calculate the annual increase in sales (revenues) or profits. Alternatively, you can calculate both the increase in revenue and the increase in profit for the year, and then calculate the average. In general, our task here is to calculate the growth rate of the market. For example, if 100 units were conditionally sold last year. goods, and this year - 110 pcs., then the market growth rate will be 110%.

3. Computing Relative Market Share

Having calculated the market growth rate for the analyzed products (divisions), it is necessary to calculate the relative market share for them. There are several ways to do this. The classic option is to take the sales volume of the analyzed product of the company and divide it by the sales volume of a similar product of the main (key, strongest) competitor. For example, the sales volume of our product is 5 million rubles, and the strongest competitor selling a similar product is 20 million rubles. Then the relative market share of our product will be - 0.25 (5 million rubles divided by 20 million rubles).

4. Construction of the BCG matrix

At the fourth last stage, the actual construction of the matrix of the Boston Consulting Group is carried out. From the origin we draw two axes: vertical (market growth rate) and horizontal (relative market share). Each axis is divided in half, into two parts. One part corresponds to low values ​​of indicators (low market growth rate, low relative market share), the other corresponds to high values ​​(high market growth rate, high relative market share). An important question to be solved here is what values ​​of the market growth rate and relative market share should be taken as central values ​​dividing the axes of the BCG matrix in half? The standard values ​​are as follows: for the market growth rate - 110%, for the relative market share - 100%. But in your case, these values ​​\u200b\u200bmay be different, you need to look at the conditions of a particular situation.

Thus, each axis is divided in half. As a result, four square sectors are formed, each of which has its own name and meaning. We will talk about their analysis later, but for now it is necessary to put the analyzed goods (divisions) on the field of the BCG matrix. To do this, sequentially mark the market growth rate and the relative market share of each product on the axes, and draw a circle at the intersection of these values. Ideally, the diameter of each such circle should be proportional to the profit or revenue corresponding to this product. So you can make the BCG matrix even more informative.

Analysis of the BCG matrix

Having built the BCG matrix, you will see that your products (divisions, brands) ended up in different squares. Each of these squares has eigenvalue and a special name. Let's consider them.

STARS. They have the highest market growth rates and hold the largest market share. They are popular, attractive, promising, rapidly developing, but at the same time require significant investment in themselves. That's why they are "Stars". Sooner or later, the growth of the "Stars" begins to slow down and then they turn into "Cash Cows".

CASH COWS (aka "Money Bags"). They are characterized by a large market share, with a low rate of its growth. Cash cows do not require expensive investments, while bringing a stable and high income. The company uses this income to fund other products. Hence the name, these products literally "milk".

WILD CATS (also known as "Dark Horses", "Problem Children", "Problems" or "Question Marks"). They have it the other way around. The relative market share is small, but the sales growth rate is high. It takes a lot of effort and expense to increase their market share. Therefore, the company must conduct a thorough analysis of the BCG matrix and assess whether the "Dark Horses" are capable of becoming "Stars", whether it is worth investing in them. In general, the picture in their cases is very unclear, and the stakes are high, which is why they are "Dark Horses".

DEAD DOGS (or "Lame Ducks", "Dead Weight"). They are all bad. Low relative market share, low market growth. Their income and profitability are low. They usually pay for themselves, but nothing more. There are no prospects. Dead Dogs should be disposed of, or at least their funding stopped if they can be dispensed with (there may be a situation where they are needed for the Stars, for example).

BCG matrix scenarios (strategies)

Based on the analysis of goods according to the matrix of the Boston Consulting Group, the following main strategies of the BCG matrix can be proposed:

INCREASE MARKET SHARE. Applied to "Dark Horses" in order to turn them into "Stars" - a popular and well-selling item.

KEEPING MARKET SHARE. Suitable for "Cash Cows", as they bring a good stable income and it is desirable to maintain this state of affairs as much as possible.

REDUCING MARKET SHARE. Perhaps in relation to "Dogs", unpromising "Difficult Children" and weak "Cash Cows".

LIQUIDATION. Sometimes the liquidation of this line of business is the only reasonable option for "Dogs" and "Difficult Children", which, most likely, are not destined to become "Stars".

market matrix competition consulting

Conclusions on the BCG matrix

Having built and analyzed the matrix of the Boston Consulting Group, a number of conclusions can be drawn from it:

1. Management and commercial decisions should be made in relation to the following groups of the BCG matrix: a) Stars - maintaining leading positions; b) Cash cows - obtaining the maximum possible profit, over the longest possible period of time; c) Wild cats - for promising products investment and development; G) Dead dogs- termination of their support and / or withdrawal from the market (out of production).

2. Measures should be taken to form a balanced portfolio according to the BCG matrix. Ideally, such a portfolio consists of 2 types of goods: a) Goods that bring income to the company at the present time. These are "Cash Cows" and "Stars". They are making a profit today, right now. The money received from them (primarily from Dairy Cows) can be invested in the development of the company. b) Goods that will provide the company with income in the future. These are promising "Wild Cats". Currently, they can generate very little income, not at all, or even be unprofitable (due to investment in their development). But in the future, under favorable conditions, these "Wild Cats" will become "Cash Cows" or "Stars" and begin to bring in a good income.

3. Conduct a SWOT analysis of the company (business lines)

Each of the factors under consideration for each of the five forces of competition is assessed on a point scale (ratings range from 1 to 3 points): “1” point corresponded to the absence of the factor manifestation; "2" points corresponded to a weak manifestation of this factor; "3" points corresponded to a significant manifestation of this factor. Based on the results, the average score for each factor and each competition strength was calculated (Table 3).

4. Conduct a SWOT analysis of the company (business lines)

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Enterprises that produce goods or provide services in a large assortment are forced to conduct a comparative analysis of the firm's business units to make a decision on the allocation of investment resources. The maximum financial investments are received by the priority area of ​​the company's activity, which brings the maximum profit. The tool for managing the product range is the BCG matrix, an example of the construction and analysis of which helps marketers make decisions about the development or liquidation of the company's business units.

The concept and essence of the BCG matrix

The formation of the company's long-term plans, the correct distribution of financial resources between the components of the company's strategic portfolio occurs through the use of a tool created by the Boston Consulting Group. Hence the name of the tool - the BCG matrix. An example of building a system is based on the dependence of the relative market share on its growth rate.

The competitiveness of a product is expressed as an indicator of the relative market share and is plotted along the X axis. An indicator whose value is greater than one is considered high.

The attractiveness and maturity of the market is characterized by the value of its growth rate. Data for this parameter is plotted on the matrix along the Y axis.

After calculating the relative share and growth rate of the market for each good that the firm produces, the data is transferred to a system called the BCG matrix (an example of the system will be discussed below).

Matrix quadrants

When product groups are distributed according to the BCG model, each assortment unit falls into one of the four quadrants of the matrix. Each quadrant has its own name and recommendations for decision making. Below is a table consisting of the same categories as the BCG matrix, an example of the construction and analysis of which cannot be done without knowing the features of each zone.

Objects of analysis

An example of the construction and analysis of the BCG matrix is ​​impossible without the definition of goods that can be considered in the projection of this system.

1. Lines of business that are unrelated. These can be: hairdressing services and the production of electric kettles.
2. Assortment groups of the company sold in one market. For example, selling apartments, renting apartments, selling houses, etc. That is, the real estate market is considered.
3. Goods classified in one group. For example, the production of utensils made of glass, metal or ceramics.

BCG matrix: an example of construction and analysis in Excel

To determine the life cycle of a product and strategic planning marketing activities enterprises will consider an example with fictitious data to understand the topic of the article.

The first step is to collect and tabulate data on the analyzed products. This operation is simple, you need to create a table in Excel and enter data on the enterprise into it.

The second step is the calculation of market indicators: growth rate and relative share. To do this, you will need to enter formulas for automatic calculation in the cells of the created table:

• In cell E3, which will contain the value of the market growth rate, this formula looks like this: \u003d C3 / B3. If you get a lot of decimal places, then you need to reduce the bit depth to two.
• The procedure is the same for each item.
• In cell F9, which is responsible for relative market share, the formula looks like this: = C3 / D3.

The result is a completed table.

The table shows that sales of the first product fell by 37% in 2015, while sales of product 3 increased by 49%. Competitiveness or relative market share for the first category of goods is lower than that of competitors by 47%, but for the third and fourth goods it is higher by 33% and 26%, respectively.

Graphic display

Based on the data in the table, a BCG matrix is ​​constructed, an example of construction in Excel of which is based on the choice of a chart of the “Bubble” type.

After selecting the type of chart, an empty field appears, by clicking the right mouse button on which you need to call up a window for selecting data to fill in the future matrix.

After adding a row, its data is filled in. Each row is a product of the enterprise. For the first item, the data will be as follows:

1. The row name is cell A3.
2. X-axis - cell F3.
3. Y-axis - cell E3.
4. The bubble size is cell C3.

This is how the BCG matrix is ​​created (for all four goods), the example of constructing other goods is similar to the first one.

Change the format of the axes

When all the products are graphically displayed on the diagram, it is necessary to break it into quadrants. This distinction is the X, Y axes. You only need to change automatic settings axes. By clicking on the vertical scale, the “Format” tab is selected and the “Format Selection” window is called up on the left side of the panel.

Changing the vertical axis:

• The maximum value is the average ODR multiplied by 2: (0.53+0.56+1.33+1.26)/4=0.92; 0.92*2=1.84.
• The main and intermediate divisions are the average ODR.
• Intersection with the X-axis - average ODR.

Changing the horizontal axis:

• The minimum value is assumed to be "0".
• The maximum value is taken as "2".
• The remaining parameters are "1".

The resulting diagram is the BCG matrix. An example of the construction and analysis of such a model will give an answer about the priority development of the company's assortment units.

Signatures

To complete the construction of the BCG system, it remains to create labels for the axes and quadrants. It is necessary to select the diagram and go to the "Layout" section of the program. Using the "Inscription" icon, the cursor is moved to the first quadrant and its name is written. This procedure is repeated in the next three zones of the matrix.

To create a chart title, which is located in the center of the BCG model, the pictogram of the same name is selected, following from the "Inscription".

Following from left to right on the Excel 2010 toolbar of the "Layout" section, similarly to the previous labels, axis labels are created. As a result, the BCG matrix, an example of construction in Excel of which was considered, has the following form:

Analysis of assortment units

Building a diagram of the relationship between market share and its growth rate is half the solution to the problem of strategic marketing. The crucial point is the correct interpretation of the position of goods on the market and the choice of further actions (strategies) for their development or liquidation. BCG matrix, analysis example:

Product No. 1, located in the zone of low market growth and relative share. This commodity unit has already passed its life cycle and it does not bring profit to the company. In a real situation, it would be necessary to conduct a detailed analysis of such goods and determine the conditions for their release in the absence of profit from their sale. Theoretically, it is better to exclude this commodity group and direct the freed up resources to the development of promising benefits.

Product #2 is in a growing market but requires investment to increase competitiveness. It is a promising product.

Product #3 is at the peak of its life cycle. This type assortment unit has high ODR and market growth rates. An increase in investment is required so that in the future the business unit of the company that produces this product brings a stable income.

Product No. 4 is a profit generator. Cash, coming to the company from the sale of this category of the assortment unit, it is recommended to direct it to the development of goods No. 2, 3.

Strategies

An example of the construction and analysis of the BCG matrix contributes to the selection of the following four strategies.

1. Increase in market share. Such a development plan is acceptable for products located in the Wild Cats zone, with the aim of moving them into the Stars quadrant.
2. Maintaining market share. For getting stable income from "Cash Cows" it is recommended to apply this strategy.
3. Decreasing market share. Let's apply the plan to weak "Cash Cows", "Dogs" and unpromising "Wild Cats".
4. Liquidation is a strategy for the "Dogs" and unpromising "Wild Cats".

BCG matrix: an example of construction in a Word

The method of building a model in Word is more laborious and not entirely clear. An example will be considered according to the data that was used to build the matrix in Excel.

The column “Market growth rate” appears, the values ​​of which are calculated as follows: (1-growth rate data) * 100%.

A table is built with four rows and columns. The first column is combined into one cell and signed as "Market Growth Rate". In the remaining columns, you need to combine rows in pairs to get two large cells at the top of the table and two rows left at the bottom. As shown.

The lowest line will contain the coordinate "Relative market share", above it - the values: less or more than 1. Referring to the data of the table (to its last two columns), the definition of goods by quadrants begins. For example, for the first product, ODR = 0.53, which is less than one, it means that its location will be either in the first or in the fourth quadrant. Market growth rate - negative meaning equal to -37%. Since the growth rate in the matrix is ​​divided by a value of 10%, then product number 1 definitely falls into the fourth quadrant. The same distribution occurs with the remaining assortment units. The result should match the Excel chart.

The BCG matrix: an example of construction and analysis determines the strategic positions of the company's assortment units and participates in making decisions about the allocation of enterprise resources.

The two-dimensional matrix developed by the Boston Advisory Group has received wide application in the practice of strategic choice. Therefore, this matrix is ​​better known as the Boston Consulting Group matrix, or the BCG matrix. This matrix allows a business to categorize products by their market share relative to major competitors and annual growth rates in the industry.

The matrix makes it possible to determine which product of the enterprise occupies a leading position compared to competitors, what is the dynamics of its markets, and allows for a preliminary distribution of strategic financial resources between products. The matrix is ​​built on a well-known premise - the greater the share of the product on the market (the greater the volume of production), the lower the unit costs per unit of output and the higher the profit as a result of relative economies of production volumes.

The BCG matrix is ​​compiled for the entire portfolio, and for each product the following information should be available:

The volume of sales in value terms, it is represented on the matrix of the area of ​​the circle;

Product market share relative to the largest competitor, which determines the horizontal position of the circle in the matrix;

The growth rate of the market in which the enterprise operates with its products determines the vertical component of the circle in the matrix.

From the BCG matrices, if they are performed for different periods of time, it is possible to build a kind of dynamic series that will give (a visual representation of the patterns of movement in the market of each product, the directions and rates of promotion of goods on the market. When constructing the BCG matrix, the growth rate of sales of goods is divided into "high" and "low" by a conditional line at the level of 10%. The relative market share is also divided into "high" and "low", and the border between them is 1.0. A coefficient of 1.0 indicates that the company is close to leadership.

The interpretation of the BCG matrix is ​​based on the following provisions:

First, the gross profit and total revenues of the enterprise increase in proportion to the growth of the market share of the enterprise;

Secondly, if an enterprise wants to maintain market share, then the need for additional funds grows in proportion to the growth rate of the market;

Thirdly, since the growth of each market eventually declines as soon as the product approaches its maturity stage in its life cycle, therefore, in order not to lose the position won earlier in the market, the profits made should be channeled or distributed among products that have growth trends.

Based on the foregoing, the matrix proposes the following classification of product types in the respective strategic areas, depending on the characteristics of profit distribution: “stars”, “cash cows”, “ wild cats" (or "question mark"), "dogs". This classification is shown in fig. 6.2.

"Stars" are products that occupy a leading position in a rapidly developing industry. They generate significant profits, but at the same time require significant amounts of resources to finance continued growth, as well as tight management control over these resources. In other words, they should be protected and strengthened in order to maintain rapid growth.

Rice. 6.2. BCG matrix

Cash cows are products that lead a relatively stable or declining industry. Since sales are relatively stable at no additional cost, this product generates more profit than is required to maintain its market share. Thus, the production of this type of product is a kind of cash generator for the entire enterprise, that is, to provide financial support for developing products.

“Dogs” are limited-sell products in an established or declining industry. Per long time these products failed to win the sympathy of consumers on the market, and they are significantly inferior to competitors in all respects (market share, size and structure of costs, product image, etc.), in other words, they do not produce and do not need significant amounts of financial funds. An organization with such products may try to temporarily increase profits by penetrating special markets and reducing the provision of services, or withdraw from the market.

Problem Children (Question Mark, Wild Cats) are products that have little market impact (low market share) in an emerging industry. As a rule, they are characterized by weak customer support and unclear competitive advantages. Competitors dominate the market. Because low market share usually means little profit and limited revenue, these products, in high-growth markets, require a lot of money to maintain market share and, of course, even more money to increase that share further.

On fig. 6.2, the dashed line shows that "wild cats" under certain conditions can become "stars", and "stars" with the advent of inevitable maturity will first turn into "cash cows" and then into "dogs". The solid line shows the reallocation of resources from cash cows.

Thus, within the framework of the BCG matrix, the following options can be distinguished for the choice of strategies:

- growth and increase in market share- the transformation of the "question mark" into a "star";

- maintaining market share- a strategy for "cash cows", whose income is important for growing types of products and financial innovations;

- "harvesting", i.e. getting a short-term profit share as much as possible, even at the expense of market share- a strategy for weak "cows", deprived of the future, unfortunate "question marks" and "dogs";

- business liquidation or abandonment and the use of the resulting funds in other industries - a strategy for "dogs" and "question marks" that do not have more possibilities invest to improve your position.

The BCG matrix can be used:

To determine interrelated conclusions about the position of the products (or business units) that make up the enterprise and their strategic prospects;

To conduct negotiations between top managers and managers at the business unit level and make decisions on the amount of investment (capital investment) in a particular business unit.

For example, "question marks" operating in fast-growing industries, as a rule, urgently need a constant inflow of funds to expand their business and strengthen their positions, and "money bags" with limited growth opportunities often have a cash surplus. In other words, using the BCG matrix, an enterprise forms the composition of its portfolio (that is, it determines the combination of capital investments in various industries, various business units).