To determine your own market share and the market share of your biggest competitor you will need to know how big the total market is.īased on the size of the total market, calculate your own market share. Which products do you want to include in the portfolio analysis? Start by identifying your own products or services. Both axes are assigned the same prioritization, in practice this need not be so and depends on the business strategy.Declining / collapsing markets are not taken into account.Some products are very interdependent in practice.Market growth can be influenced by the company (by boosting).Market share does not guarantee profitability.Points of criticism of the BCG Matrixīesides being a good model for mapping the (potential) performance of your various product lines, the BCG Matrix also has some criticisms: Suppose that a new pharmaceutical company starts developing a corona vaccine in 2023, they will find themselves in a market in which they have virtually no market share and there is no market growth to gain that share. You want to stop investing in a ‘Dog’, because there is nothing more to be gained from it.
These products are loss-making and have no potential to become profitable. The Dogs are a product group with a low market share and a market that will hardly grow. The money OLA earns from its rocket ice creams they can invest in, for example, alcoholic ice creams in which there is still a lot of market potential. Rocket ice creams are an example of OLA, a market with relatively low growth where OLA has a large market share. The revenue generated from a Cash Cow can be invested in Stars or Question Marks. The desired strategy here is to invest as little as possible and still maintain the market position. These products are already profitable with little growth potential in the market. The ‘Cash Cows’ are a product group with a high market share and a market with hardly any growth.
The Apple Smartwatch is an example of a product where Apple has a high market share and the smartwatch market is experiencing strong growth. These products are profitable and it is worthwhile to continue investing in this product group so that they at least maintain their market share and perhaps even continue to grow. The ‘Stars’ are a product group with a high market share and a fast growing market. High market share and high market growth.
This is because large companies already have strong differentiation combined with large market budgets. If you introduce a new smartwatch to the market, it will be difficult to gain ground, despite the fact that the market is growing rapidly. It is therefore possible to build a ‘Question Mark’ into a ‘Star’. MUST-READ 📚 → TAM SAM SOM (2023): Meaning and Examples
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