Thus when we consider growth rate and market share together, it automatically gives us an overview of the competition and the industry standards as well as an idea of what the future might bring for the product. The market share, on the other hand, comprises of the competition and the product potential in the market. Thus by having 2 basic but at the same time very important factors on X axis and Y axis, the bcg matrix makes sure that the classifications are concrete.Ĭalculating the Market growth rate comprises of both industry growth and product growth rate thereby giving a fair knowledge of where the product / SBU stands in comparison to the Industry. This growth rate is then pitched on the graph. Y-Axis – Market growth rate – The growth rate of the industry as a whole is taken into consideration from which the growth rate of the product is extrapolated.X-Axis – Relative Market Share – The market share of the business / SBU / Product in the market as compared to its competitors and overall product/category.The X-axis which is the relative market share and the Y-axis which is the Market growth rate. The BCG growth share matrix was developed by Henderson of the BCG group in 1970s.
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