DOC

The relationship between the BCG Matrix and the product life cycle

By Arthur Parker,2014-06-13 19:59
9 views 0
The relationship between the BCG Matrix and the product life cycle

    The relationship between the BCG Matrix

    and the product life cycle

    一、 the contact between the BCG Matrix and the

    product life cycle

    The horizontal axis of the BCG Matrix represents market shareand the vertical axis indicates anticipated market growth. The corporate business Is divided into four categoriesthey are

    cash cows, stars, question marks, dogs. The product life cycle is a new product progresses through a sequence of stages from introduction to grow, maturity, and decline.

    The four categories of corporate business correspond to the four stages of the product life cycle.

    (1) Question marks businesses correspond to the

    introduction stage of the product life cycle. Question

    marks businesses are in an attractive industry but hold

    a small market share percentage. In the introduction

    stagethe firm seeks to build market share rapidly

    build product awareness and develop a market for the

    product.

    (2) Starts businesses correspond to the growth

    stage of the product life cycle. Start businesses are in

    a fast-growing market, and hold a dominant share of

    that market. Their contribution to cash flow depends

    on their need for resources. In the growth stage, the

    firm seeks to build brand preference and increase

    market share. Market share tends to stabilize.

    (3) Cash cows businesses correspond to the maturity

    stage of the product life cycle. Cash cows businesses in this

    generate large amounts of cash, but their prospects for

    future growth are limited. In the maturity stage, the market

    reaches saturation. The primary objective is to defend

    market share while maximizing profit.

    (4) Dogs businesses in this category do not produce

    or consumer much cash. Howeverthey hold no promise

    for improved performance. In decline stagethere is a

    downturn in the marketas sales declinediscontinue the

    product liquidating remaining inventory or sell off.

    二、 the difference between the BCG Matrix and the

    product life cycle

    1 The corporate business Is divided into four categories from two aspects of market share and anticipated growth ratehoweverthe product life cycle is

    divided into four stages from two aspects of sales and time.

    2 The BCG Matrix can roughly judge enterprise's

    overall operating conditionsbut the product life cycle only

    reflects the market performance of a single product.

    (3)The BCG matrix mainly studies the allocation and use of corporate resources, but the produce life cycle mainly studies the use of the product marketing strategy.

    (4) The BCG matrix can reflects corporate a variety of different business conditions, but the product life cycle can not reflects all businesses and product in the curve.

Report this document

For any questions or suggestions please email
cust-service@docsford.com