Is the BCG matrix really as useful as it is made out to be?

  1. Zachary Jonah profile image65
    Zachary Jonahposted 6 years ago

    Is the BCG matrix really as useful as it is made out to be?

    I just posted my second hub analysing the BCG matrix. Question is this, is it useful for business strategists when it comes to product marketing and product development strategy? What do you think?

  2. EricGoode profile image57
    EricGoodeposted 6 years ago

    We have to stop and consider what the BCG matrix actually measures.  It measures a company's competitive position by concentrating on the dimensions of a company's market growth and share. However there are other factors that determine a company's competitive position within a particular market. It also shows a company how to balance its cash flows throughout the company which again is only part of the set of factors that allow a company to gain the competitive lead in the market. The BCG matrix also focuses more on cost leadership but fails to address the need for differentiation to gain the competitive advantage. It also does not properly show the correlation between market share and profitability.

    So in summary, it is not a tool to be used alone but with other tools that can properly address the disjoints that the BCG matrix does not properly address.