BCG Matrix – Definition, Quadrant, and Strategy
The company’s ability will be truly tested when getting a capital injection from investors. The capital must be used as well as possible so that business develops. In addition, investors feel not in vain to issue their capital. However, not all companies are ready to manage large capital. The company will be faced with the production funds and where distribution funds. This is where the role of BCG Matrix is needed.
BCG Matrix also serves to analyze work on products. So, the BCG matrix is used to find out which products that make money. In addition, it is also to recognize which products need to spend money.
This article will discuss details starting from the definition, quadrant to the BCG Matrix strategy.
Definition of BCG Matrix
BCG Matrix is a useful matrix to help companies make decisions and investments. The matrix is divided based on market share and four quadrants. The quadrant includes Stars, Cash Cow, Question Marks, and Dogs. So, being able to produce useful analysis for your business.
From this analysis, the company can recognize which products that can produce profits and which are useless. In addition, which one needs to be the focus and which can be a superior product.
In addition, the company is also able to know which businesses can make money and need investment. Also, companies can find out which businesses no longer need investment. If necessary, the business is no longer resumed.
BCG Matrix Quadrant
Business companies need to classify. Four quadrants are classification, namely:
1. Cash Cows
In general, cash cows mean products with a high market share but the growth rate is quite low. Therefore, even though the growth rate is considered low, the income produced is the maximum.
This is useful for companies if the investment needed is not so much. However, the rate of return is quite good. With a high return, there can be excess income. This can also be used for other quadrants.
Cash Cows Strategy
Cash cows are suitable for all kinds of businesses. Because the market is not so developing, companies need to use the right strategy. Among them are loyalty programs or which include customer satisfaction.
Star is an antithesis of cash cows. Because STARS means a low market share but the market growth rate is so high. So, what needs to be done by Stars is how to maintain the growth rate. If it’s bad, the company will be abandoned. However, if it’s good, it will be a cash cow in the long run.
All forms of promotional strategies are highly recommended in Stars. This is due to competition towards market growth quite strictly. So, inevitably, concentration and focus are needed.
3. Question Marks.
Question marks are products that have high market share and high growth rates. However, how is the market? Will it stay long?
This is the question. Sometimes, a company innovates to give birth to the latest products. However, often the product cannot last long. So, it will be dangerous for the company. The company name will be at stake there.
Question Marks Strategy
Because the company issued is a new product, it requires the right target strategy. Almost similar to the strategy used by Stars. However, there are more specific, namely customer acquisition strategies. This strategy is claimed to be quite effective, it removes a question mark.
Classification in Dogs as follows: Low market share and market growth rates are also low. So, the company does not require effort and investment. What must be considered is whether the business is continued or not. If not, the risk is a business or product divestment.
The first company needs to do is see how much investment is there. Then, just decide whether it needs to divest products or rebranding products. Because it can be sure to return the Dogs to Stars especially cash cows is very complicated. What allows just move to question marks. So, the most ideal is to continue to divest products.
That is the meaning, purpose, benefit, and stage of the BCG Matrix you need to know. In addition, you have also gained knowledge of why it’s important to BCG Matrix. When you have understood the importance of BCG Matrix, you are ready to run a business. For your business to grow and increase the number of customers you don’t forget to advertise through the Froggy Ads service, you can start by advertising your product, so that later you can improve visitors in your online business portal. FROGGY ADS is an online advertising service that can help you control all your product campaigns. Helps you target the targeting target you want and give you many choices to market your product.