BCG Matrix

According to the BCG Matrix, the electronics category is a question mark characterized by low market share, but potential high growth. In this instance, a decision must be made to invest heavily, sell off or invest nothing and generate whatever cash is possible (BCG Matrix). Appliances, on the other hand, are cash cows enjoying high market share, but little growth. Because growth is low, investments should be kept to a minimum with profit maximization in mind. Portfolio planning methods such as the BCG Matrix are intended as guidelines to help managers overcome tendencies to use unstructured judgment, which is prone to distortion by power or emotional factors that lead away from rational profit maximization (Brodie and Armstrong, 2003). At the same time, these authors caution that there's little evidence exists to support a causal relationship between market growth and profits, or between market share and profitability

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