Essay on BCG Matrix

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1.1 SUMMARY OF THE CASE STUDY OF GASCOYNE GOLD Tropical Cyclone Steve has dumped so much rain in the northwest, which makes the Gascoyne River has broken its banks and tens of thousands of tons of rich red topsoil has been washed out to the sea. This has made their soil and their crops as well as irrigation lines and the year’s profits have washed away from the growers, which causing them to have huge losses that cost millions of dollars. After that, the growers are back in their business again and then they formed a group named as Gascoyne Gold. Gascoyne Gold has been formed with 7 shareholders, which they have invested more than $1 million, setting up a state of the art processing and packaging facility. Before they have…show more content…
The BCG also allows a multidivisional organization to manage its portfolio of businesses by examining the relative market share position and the industry growth rate of each division which related to the other divisions in the organization. The BCG model is based on the product life cycle theory which can be used to determine which one of the product should be given the priority in the product portfolio of a business unit. It is usually based on the observations towards the company’s business units that it can be classified into four categories based on combinations of market growth and market share relative to the largest competitors that brings the name of “growth-share”. As to make sure that the long-term value creation is made, the company should have a specification of the products which contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash. The BCG matrix portrays the perspective of the product portfolio, which is the growth-share matrix. This framework of tool categorizes products within a company's portfolio or within the business units as stars, cash cows, dogs, or question marks according to growth rate, market share, and positively or negative cash flow. By using positive cash flows a company can capitalize on growth opportunities. From this analysis, it can be seen that the products that is growing
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