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Star bcg matrix8/23/2023 This is why the matrix highlights the level of cash consumption required versus the resulting cash generation. Equally, it assumes that to establish a product in a growing market will require continual investment to produce the goods/services and to increase capacity. The underlying foundation of Bruce Henderson's model is that an increase in market share will result in an improvement in cash generation. ![]() During its peak of popularity in 1970’s and 1980’s, BCG matrix / Growth Share matrix was used by almost half of the fortune 500 companies. The x-axis generally denotes the market growth rate, or cash usage - with the y-axis denoting relative market share, or cash generation.īruce Henderson reasoned that established and mature areas of a business where required to generate significant income (cash cows) which could then be invested into new highly profitable market leading products (stars). The Growth Share matrix is a business portfolio management framework that helps organization such as Starbucks in deciding How to prioritize different businesses. The matrix is scored from low to high on both the x-axis and y-axis. The quadrants are split into combinations of "market growth" and "market share", hence also being known as the growth-share matrix or growth-market-share matrix. A Star business is a business of a firm that functions in a high growth. The concept is based on four quadrants in which a company's strategic business units (SBU) or products/brands are classified. The BCG matrix is a tool used in strategic management and business analysis to. Devised as a portfolio planning tool, or corporate planning tool, the BCG growth-share matrix was first conceived by Bruce Henderson of the Boston Consulting Group back in the 1970's.
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