Advantages of this model
• Enables management assesses the organization’s present/future potential
• Provides a framework for analysis and comparison of businesses for multinational companies.
• Provides a good basis for the formulation of marketing objectives for specific international markets.
• Allows a convenient graphical form that is easily understood by the executives who are the decision-makers.
• Enables management to make informed decisions.
•Provides a useful insight into the likely opportunities and problems associated with a particular product.
• Enables management to assess the strength of a company. Disadvantages of this model
•tacey, R. D (1996) criticises the approach from three aspects.
• acmillan, H and Tampoe, M, (2000) point out that Portfolio analysis may have some of the more important snags in practice.
• Wensley(1981) points out that in BCG matrix there are problems of market definition and mea
...surement.
Wind and mahajian(1981) believe that BCG matrix is a rigid framework and has no adaptability.
• Nicholls(1995) says that the BCG matrix can not give guidance on the relative merits of any claim on resources.
•Abell and hammond (1979) identify a number of weaknesses in BCG model. Assumes market growth rate. A firm may grow the market. ?A “Dog” may be helping other products.
?High market share/Growth is not the only success factor. ?Linkage between market share and profitability is questionable.Criticism The relation between market share and profitability is questionable, since the development of the market share can require high investments. Beyond that the beginning sets a doubtful high weight on market growth and ignores the Potenzial of declining markets. The matrix could be supplemented therefore downward, thus for shrinking markets, around two fields: Been subject one (Under Dogs, sinking growth with low market share) and loser (Buckets
sinking growth with high market share).Example Coca-Cola’s BCG Matrix Coca-Cola Company at this stage matches in the Cash Cows, as its huge annual cash flow and its the highest market share compared to its competitors.
Second, it has a high growth rate due to its variety of other brands and its mass advertising. Third, as its large scale of profits, it invests heavy money to advertise and to keep their product on the No. 1 position. BCG matrix recommends investing profits to produce new products and sell them in the market.
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