BCG Portfolio

Ratios

• Relative market share = $\frac{\text{own market share}}{\text{market share of strongest competitor}}$
  • separation between unit/dollar market share
• Market Growth = $\frac{\text{total market unit sales in current year}}{\text{total market unit sales in previous year}}$
  • could also be done with dollars instead

BCG Matrix

x	Relative Market Share Low	Relative Market Share High
High Market Growth	Question Mark	Star
Low Market Growth	Poor Dog	Cash Cow

• Poor Dog
  • just don’t bother anymore
• Question Mark
  • cash flow alone not sustainable
  • either invest or divest
• Star
  • high cash flow - high costs
  • cash flow sustainable for itself and investments
  • invest or hold
• Cash Cow
  • high cash flow - low costs
  • harvest for as long as possible