BCG MATRIX AND GE MATRIX

BCG MATRIX:
BCG is a corporate planning tool, which is used to portray firm’s brand portfolio or SUBs on a
quadrant along relative market share and speed of market growth. BCG matrix is a framework,
created by Boston Consulting Group which help the corporations with analyzing their business
units or product lines. This helps the company allocate resources and is used as an analytical tool
in brand marketing, product management, strategic management, and portfolio analysis.
Why it’s important for companies?
The company must analyze its current business portfolio and decide which businesses should
receive more or less investment. And develop growth strategies for adding new products and
businesses to the portfolio, whilst at the same time deciding when products and businesses
should no longer be retained.
How to prepare this model?
This categorizes the products into one of four different areas, based on
Market share-does the product being sold have a low or high market share?
Market growth-are the numbers of potential customers in the market growing or not.
BCG MATRIX OF NESTLE
Growth share matrix help to classify their business units or product into 4 different categories:
Dogs, Stars, Cash cows, Question Mark.
CASH COWS: ( HIGH MARKET SHARE/LOW MARKET GROWTH)
These are products with a high share of a slow growth market. Cash Cows generate more than is
invested in them. So keep them in your portfolio of products for the time being.
 Nestle Dahi
 Maggi
 KitKat
 Polo
These products can made star products of nestle if nestle add new flavors and do penetration
instead of skimming.
STARS: (HIGH MARKET SHARE/HIGH MARKET GROWTH)
These are areas where there is real opportunity as the market as a whole and your share of it are
both increasing. These gains however will not be realized without further development and
investment.
  Nestle Milk pack
 Nestle’s Mineral Water
 Cerelac
 Nestle’s Nescafe Coffee
On the base of survey and statistic these products are widely used by peoples in Pakistan. So to
increase market share. Nestle should decrease the price of these products
QUESTION MARK: (LOW MARKET SHARE/ HIGH MARKET GROWTH)
These are products with a low share of a high growth market. They consume resources and
generate little in return.
 Everyday
 Milk pack cream
These are some minor default in above mentioned products like there taste and expiry dates.
These products can become star product if these defaults be removed.
DOGS: (LOW MARKET SHARE/HIGH MARKET GROWTH)
The term "dogs" refers to businesses or products that have low relative share in unattractive, low-
growth markets. Dogs may generate enough cash to break-even, but they are rarely, if ever,
worth investing in.
 Nestle Raita
 Koko Crunch
 Nestle Cereal
 Milo
These products are not sold as much due to: Targeting specific economic class, not according to
taste of peoples or only rare peoples like these products.

GE MATRIX: (McKincey Nine Box Matrix)

General Electric Matrix is more sophisticated than the BCG Matrix in three aspects
 Market (Industry) attractiveness replaces market growth as the dimension of industry
attractiveness. Market Attractiveness includes a broader range of factors other than just the
market growth rate that can determine the attractiveness of an industry / market.
Factors of market attractiveness:
Market size-Market growth rate- Market profitability- Pricing trends- Competitive intensity /
rivalry- Overall risk of returns in the industry- Opportunity to differentiate products and services-
Demand variability- Segmentation- Distribution structure.
 Competitive strength replaces market share as the dimension by which the competitive
position of each SBU is assessed. Competitive strength likewise includes a broader range of

2
 factors other than just the market share that can determine the competitive strength of a
Strategic Business Unit.
Factors of competitive strengths:
Strengths of assets and competencies- Relative brand strength- Market share- Market share
growth- Customer loyalty- Relative cost position (cost structure compared with competitors)-
Relative profit margins (compared to competitors)- Distribution strength and production
capacity- Record of technological or other innovation- Access to financial and other investment
resources.
 Finally the GE / McKinsey Matrix works with a 3*3 grid, while the BCG Matrix has
only2*2. This also allow for more sophistication.
GE MATRIX FOR TOYOTA:
To be the market leader and satisfy the requirements of its customers, the company has set
certain objectives. These are:
1.Improve Quality
2.Enhance Efficiency
3.Minimize Cost
4.Increase Productivity
Over the previous years, the company has put in its best efforts to manufacture quality cars
designed for its customers. To improve their efficiency, the company gives great importance to
its human resource as the company believes that satisfied and quality conscious team can
produced quality products. Corolla, HiLux and cuore are manufacturing in Pakistan, 65% of the
car manufactured in Pakistan which includes body and other parts except the engine which is
being imported from Japan.
COMPETITIVE STRENGTHS
High Medium Low
High (Grow/invest) (Grow/invest) (Hold)

Corolla Hilux

ATTRACTIVENESS
STRENGTHS Medium (Grow/invest) (Hold) (Harvest)

Cuore

Low (Hold) (Harvest) (Harvest)