In 1970, The Boston Consultant Group developed THE BCG Matrix for assessing the investment. This technique is used to identify the cost and return behaviour on investments. Refer to the below picture.
1. CASH COW: High
market share, Low investment, low growth, and low return.
Examples: Investment in real estate, Mutual funds, Policy bonds, Life Insurance, so on.
2. STARE: High
market share, High investment, higher growth, and higher return.
Examples:
Electronics sector, Electric automobile, IT, Communication, Energy saving, so
on.
3. QUESTION MARK: Low market share, potential growth, Problem children, and it turns into a star. Examples: Interment in the digital market, Cryptocurrency, Agriculture, so on.
4. DOG: Low market
share, Low growth, Low or no return, and worst situation.
Examples: This
is classified based on the situations. I.e. Tour, Travel, Manufacturing,
Export, so on. in the global pandemic situation.
Use of BCG BOX Analysis:
The investment is categorized based on
it behavior. Market share, Interment value, Growth rate, Retention rate, and
Future growth, so on. This matrix and the analytic method help investors assess
and inverse in right place.
Bibliography:
The Boston Consulting Group, 1760: The Boston Box (or) The BCG
Charts.
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