BCG matrix: example of construction and analysis in Excel and Word. Formation of an ideal portfolio using the BCG model and development of strategic decisions when analyzing the matrix

Enterprises that produce goods or provide services in a large assortment are forced to conduct a comparative analysis of the company's business units to make decisions on the allocation of investment resources. Maximum financial investments are received by the priority area of ​​the company's activity that brings maximum profit. A tool for managing product assortments is the BCG matrix, an example of the construction and analysis of which helps marketers make decisions on the development or liquidation of a company’s business units.

The concept and essence of the BCG matrix

The formation of the company's long-term plans and the correct distribution of financial resources between the components of the company's strategic portfolio occurs through the use of a tool created by the Boston Consulting Group. Hence the name of the tool - the BCG matrix. An example of building a system is based on the dependence of the relative market share on its growth rate.

The competitiveness of a product is expressed by the indicator of relative market share and is plotted on the X-axis. An indicator whose value is greater than one is considered high.

The attractiveness and maturity of the market is characterized by the value of its growth rate. Data for this parameter are plotted on the matrix along the Y axis.

After calculating the relative share and growth rate of the market for each good that the company produces, the data is transferred to a system called the BCG matrix (an example of the system will be discussed below).

Matrix quadrants

When product groups are distributed according to the BCG model, each assortment unit falls into one of the four quadrants of the matrix. Each quadrant has its own name and recommendations for making decisions. Below is a table consisting of the same categories as the BCG matrix, an example of the construction and analysis of which cannot be done without knowledge of the features of each zone.

Objects of analysis

An example of constructing and analyzing the BCG matrix is ​​impossible without identifying the goods that can be considered in the projection of this system.

1. Lines of business that are not related to each other. This could be: hairdressing services and the production of electric kettles.
2. Assortment groups of a company sold in one market. For example, selling apartments, renting apartments, selling houses, and the like. That is, the real estate market is being considered.
3. Products classified into one group. For example, the production of tableware products made of glass, metal or ceramics.

BCG matrix: example of construction and analysis in Excel

To determine the life cycle of a product and strategic planning of an enterprise’s marketing activities, an example with fictitious data will be considered to understand the topic of the article.

The first stage is the collection and tabulation of data on the analyzed goods. This operation is simple; you need to create a table in Excel and enter the company data into it.

The second step is calculating market indicators: growth rate and relative share. To do this, you will need to enter formulas for automatic calculation into the cells of the created table:

• In cell E3, which will contain the value of the market growth rate, this formula looks like this: =C3/B3. If you get a lot of decimal places, then you need to reduce the bit depth to two.
• The procedure is similar for each product.
• In cell F9, which is responsible for relative market share, the formula looks like this: = C3/D3.

The result is a completed table.

According to the table, it can be seen that sales of the first product fell by 37% in 2015, and sales of product 3 increased by 49%. Competitiveness or relative market share for the first product category is lower than that of competitors by 47%, but for the third and fourth products it is higher by 33% and 26%, respectively.

Graphic display

Based on the table data, a BCG matrix is ​​constructed, an example of which in Excel is based on choosing a “Bubble” type chart.

After selecting the chart type, an empty field appears, by right-clicking on which you need to open a window for selecting data to fill out the future matrix.

By adding a row, its data is filled in. Each row is a product of the enterprise. For the first product the data will be as follows:

1. The row name is cell A3.
2. X axis - cell F3.
3. The Y axis is cell E3.
4. The bubble size is cell C3.

This is how the BCG matrix is ​​created (for all four goods), the example of constructing the remaining goods is similar to the first.

Changing the Axes Format

When all the products are graphically displayed on the diagram, you need to divide it into quadrants. This distinction is made by the X and Y axes. You only need to change the automatic settings of the axes. By clicking the mouse on the vertical scale, the “Format” tab is selected and the “Format Selection” window is called up on the left side of the panel.

Changing the vertical axis:

• The maximum value is the average ODR multiplied by 2: (0.53+0.56+1.33+1.26)/4=0.92; 0.92*2=1.84.
• The main and intermediate divisions are the average ODR.
• The intersection with the X axis is the average ODR.

Changing the horizontal axis:

• The minimum value is assumed to be “0”.
• The maximum value is assumed to be “2”.
• The remaining parameters are "1".

The resulting diagram is the BCG matrix. An example of constructing and analyzing such a model will give an answer about the priority development of the company’s assortment units.

Signatures

To finally complete the construction of the BCG system, it remains to create the signatures of the axes and quadrants. You need to select the diagram and go to the “Layout” section of the program. Using the “Inscription” icon, move the cursor to the first quadrant and write its name. This procedure is repeated in the next three zones of the matrix.

To create a title for the diagram, which is located in the center of the BCG model, select the icon of the same name, next to the “Inscription”.

Following from left to right in the Excel 2010 toolbar in the Layout section in a manner similar to the previous labels, axis labels are created. As a result, the BCG matrix, an example of construction of which in Excel was considered, has the following form:

Analysis of assortment units

Drawing a diagram of the dependence of market share on its growth rate is half the solution to the problem of strategic marketing. The crucial point is the correct interpretation of the position of goods on the market and the choice of further actions (strategies) for their development or liquidation. BCG matrix, example of analysis:

Product No. 1 is located in the area of ​​low market growth and relative share. This product item has already passed its life cycle and does not bring profit to the company. In a real situation, it would be necessary to conduct a detailed analysis of such goods and determine the conditions for their release in the absence of profit from their sale. Theoretically, it is better to exclude this product group and direct the released resources to the development of promising goods.

Product No. 2 is in a growing market, but requires investment to increase competitiveness. It is a promising product.

Product #3 is at the peak of its life cycle. This type of assortment unit has high ODR indicators and market growth rates. An increase in investment is required so that in the future the business unit of the company producing this product will generate stable income.

Product No. 4 is a profit generator. It is recommended to direct the funds received by the company from the sale of this category of assortment unit to the development of goods No. 2, 3.

Strategies

An example of the construction and analysis of the BCG matrix helps to highlight the following four strategies.

1. Increasing market share. Such a development plan is acceptable for products located in the “Wild Cats” zone, with the goal of moving them to the “Stars” quadrant.
2. Maintaining market share. To obtain a stable income from Cash Cows, it is recommended to use this strategy.
3. Decrease in market share. Let's apply the plan to weak "Cash Cows", "Dogs" and unpromising "Wildcats".
4. Elimination is the strategy for the Dogs and the hopeless Wildcats.

BCG matrix: example of construction in Word

The method of building a model in Word is more labor-intensive and not entirely clear. An example will be considered based on the data that was used to construct the matrix in Excel.

The “Market Growth Rate” column appears, the values ​​of which are calculated as follows: (1-growth rate data)*100%.

A table of four rows and columns is built. The first column is combined into one cell and labeled “Market Growth Rate”. In the remaining columns, you need to combine rows in pairs so that you get two large cells at the top of the table and two rows left at the bottom. As in the picture.

In the lowest line there will be a coordinate “Relative market share”, above it - values: less or more than 1. Referring to the table data (its last two columns), the definition of goods by quadrant begins. For example, for the first product, ODR = 0.53, which is less than one, means its location will be either in the first or fourth quadrant. The market growth rate is negative, equal to -37%. Since the growth rate in the matrix is ​​divided by a value of 10%, then clearly product number 1 falls into the fourth quadrant. The same distribution occurs with the remaining assortment units. The result should match the Excel diagram.

The BCG matrix: an example of construction and analysis determines the strategic positions of the company’s assortment units and participates in decision-making on the distribution of enterprise resources.

It is perhaps difficult to give an example of a more well-known, visual and simple portfolio analysis tool than BCG matrix. The diagram, divided into four sectors, with original, memorable names (“Stars”, “Dead Dogs”, “Problem Children” and “Cash Cows”) is known today to any marketer, manager, teacher or student.

The matrix, developed by the Boston Consulting Group (USA), quickly gained popularity due to its simplicity and clarity of analysis of products, divisions or companies based on two objective factors: their market share and market growth rate. And today, the BCG matrix is ​​one of the minimum amounts of knowledge that any economist must master.

BCG Matrix: concept, essence, developers

BCG Matrix– a tool for strategic portfolio analysis of the market position of goods, companies and divisions based on their market growth and market share.

A tool such as the BCG matrix is ​​currently widely used in management, marketing, and other areas of the economy (and not only). The BCG Matrix was developed by experts Boston Consulting Group ("Boston Consulting Group"), engaged in management consulting, in the late 1960s, under the leadership of Bruce Henderson. The matrix owes its name to this company. In addition, the Boston Consulting Group matrix became one of the first portfolio analysis tools.

BCG Matrix. Here the horizontal axis (relative market share) is inverted: higher values ​​are located on the left, lower values ​​on the right. In my opinion, this is illogical and creates confusion. Therefore, in what follows we will use the direct order of the axis values: from smallest to largest, and not vice versa, as here.

Why do you need a company's BCG matrix? Being a simple but effective tool, it allows you to identify the most promising and, on the contrary, the “weakest” products or divisions of the enterprise. By constructing the BCG matrix, a manager or marketer receives a clear picture on the basis of which he can make a decision about which products (divisions, product groups) are worth developing and protecting, and which should be eliminated.

In graphical terms, the BCG matrix consists of two axes and four square sectors enclosed between them. Let's consider the step-by-step construction of the BCG matrix:

1. Collection of initial data.

The first step is to make a list of those products, divisions or companies that will be analyzed using the BCG matrix.
Then they need to collect data on sales volumes and/or profits for a certain period (for example, over the past year). In addition, you will need similar sales data for a key competitor (or a number of major competitors).

For convenience, it is advisable to present the data in table form. This will make them easier to process.

The first step is to collect all the source data and group them in the form of a table.

2. Calculation of the market growth rate for the year.

Then, for each product (division) analyzed, the market growth rate is calculated.

3. Calculation of relative market share.

Having calculated the market growth rate for the analyzed products (divisions), it is necessary to calculate the relative market share for them. There are several ways to do this. The classic option is to take the sales volume of the company’s product being analyzed and divide it by the sales volume of a similar product of the main (key, strongest) competitor.

For example, the sales volume of our product is 5 million rubles, and the strongest competitor selling a similar product is 20 million rubles. Then the relative market share of our product will be 0.25 (5 million rubles divided by 20 million rubles).

The next step is to calculate the relative market share (relative to the main competitor).

At the fourth and final stage, the actual construction of the matrix of the Boston Consulting Group is carried out. From the origin we draw two axes: vertical (market growth rate) and horizontal (relative market share).

Each axis is divided in half into two parts. One part corresponds to low values ​​of indicators (low market growth rate, low relative market share), the other – high values ​​(high market growth rate, high relative market share).

An important question that needs to be resolved here is what values ​​of the market growth rate and relative market share should be taken as the central values ​​dividing the axes of the BCG matrix in half? The standard values ​​are as follows: for market growth rate – 110% , For relative market share – 100% . But in your case, these values ​​may be different; you need to look at the conditions of a specific situation.

And the final action is the construction of the BCG matrix itself, followed by its analysis.

Thus, each axis is divided in half. As a result, four square sectors are formed, each of which has its own name and meaning. We will talk about their analysis later, but for now we should plot the analyzed products (divisions) on the BCG matrix field. To do this, consistently mark the market growth rate and the relative market share of each product on the axes, and draw a circle at the intersection of these values. Ideally, the diameter of each such circle should be proportional to the profit or revenue corresponding to the given product. This way you can make the BCG matrix even more informative.

BCG matrix analysis

Having built the BCG matrix, you will see that your products (divisions, brands) are in different squares. Each of these squares has its own meaning and special name. Let's look at them.

The BCG matrix field is divided into 4 zones, each of which has its own type of product/division, development features, market strategy, etc.

STARS. They have the highest market growth rates and hold the largest market share. They are popular, attractive, promising, developing quickly, but at the same time they require significant investment in themselves. That's why they are "Stars". Sooner or later, the growth of “Stars” begins to slow down and then they turn into “Cash Cows”.

DAIRY COWS(aka “Money Bags”). They are characterized by a large market share, with a low growth rate. “Cash cows” do not require costly investments, while bringing a stable and high income. The company uses this income to finance other products. Hence the name, these products literally “milk.”

WILD CATS(also known as "Dark Horses", "Problem Children", "Problems" or "Question Marks"). It's the other way around for them. The relative market share is small, but the sales growth rate is high. Increasing their market share requires great effort and expense. Therefore, the company must conduct a thorough analysis of the BCG matrix and evaluate whether the “Dark Horses” are capable of becoming “Stars” and whether it is worth investing in them. In general, the picture in their case is very unclear, and the stakes are high, which is why they are “Dark Horses”.

DEAD DOGS(or Lame Ducks, Dead Weight). Everything is bad for them. Low relative market share, low market growth rates. The income they generate and profitability are low. They usually pay for themselves, but nothing more. There are no prospects. “Dead Dogs” should be gotten rid of, or at least their funding should be stopped if they can be avoided (there may be a situation where they are needed for “Stars,” for example).

BCG matrix scenarios (strategies)

Based on the analysis of products according to the matrix of the Boston Consulting Group, we can propose the following main strategies for the BCG matrix:

INCREASING MARKET SHARE. Applicable to "Dark Horses" with the goal of turning them into "Stars" - a popular and well-selling product.

MAINTAINING MARKET SHARE. Suitable for “Cash Cows”, since they bring a good stable income and it is desirable to maintain this state of affairs as much as possible.

REDUCTION OF MARKET SHARE. Perhaps in relation to “Dogs”, unpromising “Problem Children” and weak “Cash Cows”.

LIQUIDATION. Sometimes liquidation of this line of business is the only reasonable option for “Dogs” and “Problem Children”, who, most likely, are not destined to become “Stars”.

Conclusions on the BCG matrix

Having constructed and analyzed the matrix of the Boston Consulting Group, a number of conclusions can be drawn from it: 1. Management and commercial decisions should be made in relation to the following groups of the BCG matrix:
a) Stars – maintaining a leading position;
b) Cash cows - obtaining the maximum possible profit over the longest possible period of time;
c) Wild cats – for promising products, investment and development;
d) Dead dogs – termination of their support and/or withdrawal from the market (discontinuation).

BCG Matrix. The orange arrow shows the life cycle of a product that sequentially goes through all stages, from being in the status of “Wild Cats” to becoming “Dead Dogs”. The purple arrows depict typical investment flows.

2. Measures should be taken to create balanced portfolio according to the BCG matrix. Ideally, such a portfolio consists of 2 types of goods:

a) Products that generate income for the company present time. These are "Cash Cows" and "Stars". They are making profits today, right now. The funds received from them (primarily from Cash Cows) can be invested in the development of the company.

b) Goods that the companies will provide future income. These are up-and-coming Wildcats. Currently, they may generate very little income, no income at all, or even be unprofitable (due to investments in their development). But in the future, under favorable conditions, these “Wild Cats” will become “Cash Cows” or “Stars” and will begin to generate good income.

This is what a balanced portfolio should look like according to the BCG matrix!

Advantages and disadvantages of the BCG matrix

The BCG matrix, as a portfolio analysis tool, has its pros and cons. Let's list some of them.

Advantages of the BCG matrix:

• well-thought-out theoretical framework ( the vertical axis corresponds to the product life cycle, the horizontal axis corresponds to the effect of production scale);
• objectivity of the estimated parameters ( market growth rate, relative market share);
• ease of construction;
• clarity and clarity;
• much attention is paid to cash flows;

Disadvantages of the BCG matrix:

• difficult to clearly define market share;
• only two factors are assessed, while other equally important factors are overlooked;
• not all situations can be described within the 4 study groups;
• does not work when analyzing industries with a low level of competition;
• the dynamics of indicators and trends are almost not taken into account;
• The BCG matrix allows you to develop strategic decisions, but says nothing about the tactical aspects in the implementation of these strategies.

Download a ready-made template for the BCG matrix in Excel format

Galyautdinov R.R.

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Material from the site

Brief information about the tool

Method BCG Matrix (BCG Matrix)– one of the most famous business management tools. BCG was created by the founder of the Boston consulting group, Bruce D. Henderson, in the early 70s of the last century. The purpose of this matrix is ​​to analyze the relevance of the company’s products depending on the growth of the market for this product and the share it occupies. The BGK matrix has another name - "Growth - market share".

Corporate Portfolio Management

The BCG model is a fairly well-known business portfolio optimization tool that focuses on the following issues:
1) Portfolio balance.
2) Achieving a certain market position as a formulated goal for a specific business in a given strategic perspective.
3) The attractiveness of the products in the portfolio in terms of profitability or growth rate.
4) In what specific areas of activity should investments or income be directed in this strategic period?
5) Level of compliance with other types of business in terms of creating synergy.
Also known as the “market share - growth rate” matrix, as it represents the position of a particular business in the strategic space. This matrix shows the relative share of a company's specific product in a specific market for that product. And also measuring the growth rate of the market for the corresponding product, that is, the growth of consumer demand for a certain product.

Construction of the BCG matrix

It represents the intersection of axes, where the horizontal axis corresponds to relative market share. It is calculated as the ratio of your own sales to the sales of the strongest competitor or three strongest competitors, depending on the degree of concentration in a particular market.

The vertical axis corresponds to the market growth rate.

Thus, the BCG matrix results in four quadrants, each of which contains different companies.

The Boston Matrix is ​​based on the product life cycle model. It is based on two assumptions.

1. A business with a significant market share gains a competitive advantage in terms of production costs as a result of the experience effect. It follows that the largest competitor has the highest profitability when selling at market prices and for it the financial flows are maximum.
2. Presence in a growing market means an increased need for financial resources for its development, i.e. renovation and expansion of production, intensive advertising, etc. If the market growth rate is low, such as a mature market, then the product does not require significant financing.

Four stages of the BCG matrix

Access to the market

1. Access to the market (product - "problem"). This product is also called "Problem Children", "Question Marks", "Wildcats", "Dark Horses". A characteristic feature is a low share in a rapidly growing market. This is a weak position that requires large investments and does not provide tangible profits. In this situation, you either need to make a serious investment in the business, or sell it, or invest nothing and get a possible residual profit. But we must remember that under certain conditions and proper investments, products in this group can become "Stars".

Height

1. Height (product-"Star") These are leaders in a rapidly growing market. They provide high profits, but to maintain their leading position they need investment. When the market stabilizes, they may move into the category "Cash cows".

Maturity

1. Maturity (product - "Cash Cow"). This product is also called "Money Bags". As a rule, these are yesterday's "Stars" who constitute the company's main asset. Products have a high market share in markets and low rates of development. The profit from Cash Cows is greater than the investment. It is advisable to direct funds from the sales of “Cash Cows” to the development of “Difficult Children” and to support “Stars”.

Recession

1. Recession (product - "dog"). This product is also called "Lame Ducks", "Dead Weight". The product is characterized by a low growth rate and a small market share. Typically, products are unprofitable and require additional investment to maintain their positions. “Dogs” are supported by large companies if they are related to their direct activities. If there is no such need, then it is better to get rid of them or minimize their presence in the company’s assortment policy.

Quadrant of the BCG matrix

The BCG matrix quadrant represents a typical set of strategic decisions for specific business segments:
Stars are divisions that have a relatively high market share in high-growth industries. Therefore, they must be strengthened and protected. That is, maintain or increase the corresponding share of business in a given market.
“Cash cows” - since these business units generate more profit than they require investment, therefore, we must take advantage of these opportunities, but do not forget about control. You should also not forget about a certain share of investments and costs for this segment of the business, but the optimal amount of investment should be set.
The excess cash that “cows” provide should also not be spent thoughtlessly. This money should be used for a strategic perspective, that is, it should be directed to the development of other areas of the business.
“Difficult children” or “question marks” require a special approach. This business segment is worth studying, analyzing, and predicting its prospects. It is quite possible that with the help of targeted investments this business segment can be transformed into “stars”. In the most unoptimistic case, this market share can be reduced, but it must be preserved and in no case be liquidated.
“Dogs” represent weak growth prospects and a lagging position in the market compared to its leaders, which limits their profit margins. Therefore, they should be gotten rid of. In the strategic period, the corresponding business areas are either liquidated or reduced.

Company portfolio taking into account the parameters of the BCG matrix

To ensure long-term value creation, a company must have a product mix—both high-growth potential products that require cash investment and low-growth potential products that supply cash.

Disadvantages and advantages of BCG

Like every business tool, the Boston Matrix has its own advantages and disadvantages that must be taken into account when planning a business.

So, its unconditional advantages we can consider the clarity and simplicity of construction, as well as the objectivity of the analyzed parameters (relative market share and market growth rate.

TO shortcomings It can be attributed to the fact that it simplifies the complex decision-making process. In practice, there are many situations when recommendations developed on its basis are unacceptable. For example, it is often important for consumers to see some “Dog” products in the assortment, and their removal may lead to an outflow of customers.

It is also unattractive to assume that market share corresponds to profit, because this rule may be violated when introducing a new product to the market with large investment costs. The assumption that a market decline is caused by the end of a product’s life cycle is not always correct.

Limitations of the Boston Consulting Group Matrix

The practice of using the BCG model has its pros and cons, as well as clear boundaries of its application.
Significant limitations of the BCG model include the following:
1) The strategic prospects of all portfolios of the organization must be commensurate with growth rates. This requires that the relevant products, in the strategic perspective under consideration, remain in stable phases of their life cycle.
2) The high market share that has been achieved is not the only factor of success, and not necessarily a high level of profitability.
3) To develop competition and determine the organization’s future market position, it is enough to know the value of the relative market share using the BCG model methodology.
4) Sometimes “Dogs” can bring even more profit than “Cash Cows”. This means that the quadrant of the matrix is ​​information with relative truthfulness.
5) Under difficult competitive conditions, other strategic analysis tools are needed, i.e. another model for building an organization's strategy.

Links

This is a preliminary encyclopedic article on this topic. You can contribute to the development of the project by improving and expanding the text of the publication in accordance with the rules of the project. You can find the user manual

Boston Advisory Group (BCG) Matrix

The Boston Consulting Group (BCG) Matrix is ​​considered the first successful attempt to apply a strategic approach to the analysis and formation of an enterprise's product and competitive strategy. It was first introduced in the late 1960s by BCG founder Bruce Henderson as a tool for analyzing the position of a company's products in the market. Of the variety of factors characterizing it, only two main ones were selected for constructing the matrix: sales growth (profitability) of the product and its market share relative to its main competitors. The authors proceeded from the assumption that according to these criteria it is possible to classify all the products of an enterprise and, based on such an analysis, develop proposals for business strategies.

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Rice. 6.3. Boston Advisory Group Matrix

Graphically (Fig. 6.3), the BCG matrix represents four squares, built in a two-dimensional coordinate system of “sales growth rate” (vertical axis) and “relative market share” (horizontal axis). When constructing it, the growth rate of product sales is divided into “high” and “low” by a conventional line at a level, for example, 5 or 10%. In practice, this limit can be set at any level acceptable for analysis and is determined by the enterprise itself. It is not recommended to set it below 5% or below the growth rate of the economy (industry) as a whole. In the original version, such a limit was drawn at the level of double the growth of the country's gross domestic product with its increase by the inflation factor.

Relative share market is the ratio of the market share of the product (type of activity) of a given enterprise to the market share occupied by the leading competitor. For example, if product A occupies 10% of the market, and the main competitor 25%, then the relative market share for product A will be 0.4. If the company's sales for product B have the largest market share - 40%, and the main competitor - 20 %, then the relative market share for B will be 2.0. The number of competitors is not taken into account in this matrix construction methodology.

Relative market share is also divided into “high” and “low”, with the boundary between them being 1.0. A coefficient of 1.0 shows that the company is close to leadership: its share is close to that of its strongest competitor. A coefficient above 1 indicates the leading position of the company's product in the industry. From this point of view, the left side of the matrix highlights the leading types of enterprise products in the industry, while the right side highlights the lagging ones. It seems to the author that industry average indicators can also be used as such a boundary, which in many cases is more logical, simpler and clearer.

Depending on the place occupied in the matrix, products (or products) have different names. Products that account for a significant portion of a rapidly growing market are placed in its most favorable upper left zone. Such products received the figurative name “stars”. Products with a significant share of a weakly growing market began to be called “cash cows.” If the market share of a product is small, but its sales are growing, then the products fall into the category of “problem children” (“calves” or “question marks”). Products that were able to secure only a small share of the market despite its weak development are called “dogs.” In the literature on strategic management, you can find other names for the identified types of products, which does not change the methodology for their grouping.

The BCG matrix is ​​compiled for all products manufactured by an enterprise, or, as they say now, for the entire portfolio of its products or services. In this sense, it can be considered an example of portfolio analysis. To compile it for each product there should be the following information:

Sales volume in value terms, it is represented on a matrix with the area of ​​a circle;

The product's market share relative to its largest competitor, which determines the horizontal position of the circle in the matrix;

The growth rate of the market in which the enterprise operates with its products determines the vertical position of the circle in the matrix.

Based on BCG matrices covering different periods of time, it is possible to construct a kind of dynamic series that will give a visual representation of the patterns, directions and rates of promotion of each product on the market. Analysis of matrices makes it possible to determine which products or services of an enterprise occupy leading positions in comparison with competitors, which ones are lagging behind, as well as preliminary assess the feasibility and directions of distribution of strategic resources between them. Based on this form of presenting the results of studying the position of an enterprise’s products on the market, we can say that this is a relatively simple, visual and ingenious tool for strategic analysis. It is quite clear that such results can be presented in another form: in the form of analytical tables, time series, etc. and enterprise managers usually know both the sales volumes of their products and their profitability, as well as their closest competitors. What is new in the BCG matrix is ​​the linking of these indicators with the position of the product on the market and its original division, as well as the form for presenting the results of the analysis.

The construction and subsequent interpretation of the BCG matrix data are based on the following premises:

· an increase in the market share of a product (hence an increase in production and sales volumes) reduces unit costs and increases profits as a result of relative savings from increased production volumes.

· gross profit and total income of the enterprise increase in proportion to the growth of the enterprise's market share;

· the need for additional funds to support the enterprise's achieved market share grows in proportion to the rate of market growth;

· Since the market growth of each product ultimately decreases as it approaches the maturity stage of the life cycle, in order not to lose its overall position in the market, the profit received by the enterprise should be directed to the production of products that have growth trends.

Below are the main classification characteristics of product types in the corresponding strategic zones of the BCG matrix, depending on their profitability and market share with possible enterprise strategies in relation to them:

"Stars"- products that occupy a leading position in a rapidly developing industry. They generate significant profits, but at the same time require significant amounts of resources to finance continued growth, as well as tight management control over these resources. It is strategically important to protect and strengthen them in order to maintain rapid growth.

"Milch cow"- products that occupy a leading position in a relatively stable or declining industry. Since sales are relatively stable without any additional costs, this product generates more profit than is required to maintain its market share. Thus, the production of products of this type is a kind of cash generator for the entire enterprise, that is, to provide financial support for developing products.

"Dogs"- products with limited sales volume in an established or declining industry. Over a long period of time on the market, these products failed to win the sympathy of consumers, and they are significantly inferior to competitors in all indicators (market share, size and cost structure, image, etc.), in other words, they do not produce and do not need significant volumes of financial resources. An organization with such products may try to temporarily increase profits by penetrating special markets and reducing the costs of serving them, or exit the market.

"Difficult Children"(“question marks”, “calves”) - products that have a weak market impact (small market share) in a developing industry. They typically have weak customer support and unclear competitive advantages. Competitors occupy a leading position in the market. Since low market share usually means small profits and limited revenue, these products, being in high-growth markets, require large amounts of capital to maintain market share and, naturally, even greater capital to further increase that share.

When strategically analyzing the position of individual product groups or products on the market, it should be taken into account that “difficult children” under certain conditions can become “stars”, and “stars” with the advent of maturity will turn first into “cash cows” and then into “dogs”. Based on the data of the BCG matrix, you can choose the following main options for the enterprise’s marketing strategies:

Growth and increase in market share - turning a “question mark” into a “star”;

Maintaining market share is a strategy for cash cows whose income is important for growing product types and financial innovation;

“harvesting”, i.e. obtaining short-term profits in the maximum possible size, even at the expense of reducing market share - a strategy for weak “cash cows”, deprived of a future, unlucky “question marks” and “dogs”;

Liquidation of a business or abandonment of it and use of the received
resulting funds in other industries - a strategy for
“dogs” and “question marks” that have no more opportunities
invest to improve your position.

The BCG matrix can be used:

The advantages of the BCG matrix from the point of view of using it as a tool for strategic analysis of the internal environment of an enterprise include the following:

Focuses attention on the consumer, the key end results of the enterprise - the product (the enterprise's food basket), the volume of its production and sales and its profitability, based on which it is possible to analyze all the steps taken for this within the organization;

Makes it possible to visually present and analyze in detail the results of using the adopted marketing strategies of the enterprise, the position in the market and the contribution of each product (type of activity) to the overall results of the enterprise;

Shows possible priorities when choosing options for marketing, production and financial decisions for various types of activities, competition strategies, and the formation of an enterprise’s business portfolio;

Gives a certain general picture of the demand and competitiveness of the enterprise’s products;

Helps justify various options for marketing strategies;

It is a simple, easy-to-understand and use approach to the strategic analysis of an enterprise’s product basket.

To the main shortcomings BCG matrices can be classified as:

More focused on enterprises that are leaders or aspiring to leadership;

Does not provide an answer about the strategic potential, capabilities of the enterprise and the efficiency of using its resources. Such an important area of ​​strategic analysis as the analysis of enterprise resources remains outside the matrix;

It does not answer the questions of what will happen to the “difficult children”: will they grow into leaders or losers, how long will the “stars” burn and the “cows” produce high milk yields;

When preparing the matrix, it may be difficult to find relevant information on competitors' products, for example, their cost, which is not included in statistical reporting, as well as in the balance sheets and annual reports of enterprises, which can be found in the enterprise register. For successful use, the matrix requires good knowledge of competitors, the market, fairly accurate positioning of the enterprise’s products on it, but does not provide analysis tools suitable for this;

The matrix is ​​focused on the financial flows and product strategies of the enterprise, while strategies in other areas of activity are no less important for it: in production, technology, personnel, management, investments, etc.;

Does not take into account the nature of the market, the number of competitors and other market factors, which without additional analysis may lead to the adoption of incorrect or less profitable strategies.

The BCG matrix has received wide recognition in the theory and practice of management and is included for study in many textbooks on strategic management. Despite the noted shortcomings, it still remains a useful tool in sales planning and determining product strategies for an enterprise. Although economic conditions have changed greatly since the creation of the matrix - in the context of globalization, the number of external factors and the speed of changes in the market have increased significantly, nevertheless, its construction very clearly demonstrates the current state of the enterprise’s product portfolio and provides the basis for making new decisions in the field of strategic management.

McKinsey Matrix

A development of the approach proposed by BCG is the matrix “Industry Attractiveness – Strategic Position of the Enterprise”, developed by General Electric with the participation of the consulting firm McKinsey to analyze its product portfolio. In the literature on strategic management it is found under these two names. When constructing it, the authors took into account a number of shortcomings of the Boston Consulting Group matrix and introduced a significantly larger number of market factors and evaluation criteria into the analysis.

The McKinsey matrix is ​​also constructed in a two-dimensional coordinate system, the vertical axis of which represents the multifactor vector “attractiveness of the industry (product market),” and the horizontal axis represents the competitive position of the business unit of the enterprise (product) in a given market. To assess the position of the enterprise’s products, integral indicators “good” (high), “average”, “low” are used. They consist of assessments of a number of factors, the selection and calculation of which is carried out in the process of developing the matrix by the enterprise. In table Table 6.1 shows factors that can be used to assess the attractiveness of the product market and its competitive position (position of the enterprise’s business unit) in this market. It should be emphasized that according to both criteria in Table. 6.1 provides an approximate list of evaluation factors. In each specific case, their choice is determined by the enterprise itself, which makes it possible to take into account the characteristics of each industry and each enterprise.

Table 6.1

Factors determining the attractiveness of the market and the strategic position of the enterprise's products

The matrix consists of nine fields (squares), or has a dimension of 3x3. Compared to the BCG matrix, it is more detailed and allows us to give not only a more detailed classification of the types of products of an enterprise, but also to consider broader opportunities for strategic choice of areas of its activity (Fig. 6.4). Sales volumes of the analyzed types of products are shown on the matrix in the form of circles. Their size must correspond to the total sales volume of products of this type on the market. The enterprise's share is highlighted in this circle as a segment. The strategic position of a product (business line) with this matrix construction improves as it moves in it from right to left and from bottom to top.

An enterprise that decides to use the McKinsey matrix must assess its position for each of those listed in the table. 6.1 factors. Their numerical value is determined by the method of expert assessments. To calculate such ratings, you can use, for example, a scale of values ​​from 1 to 5, which allows you to distinguish three levels of ratings: 1-2 - low, 3 - medium, 4-5 - high. If necessary, other scales can be used. Let's look at a conditional example of how this matrix is ​​constructed.

The assessment of the level of attractiveness of the industry is calculated in the following order:

1. A range of factors or indicators is established by which the attractiveness of the industry (product market) will be assessed. Such factors may be industry growth, intensity of competition, average profitability of industry products, industry growth, market size, technological stability, etc. (see Table 6.1). The developers of the matrix themselves determine what factors should be taken into account when assessing the industry.

2. The share of each factor in the overall assessment of the attractiveness of a given market is determined in terms of its significance for the enterprise. Those factors that are most important for assessing the attractiveness of an industry are given higher weights, while those that are less important are given lower weights. For the convenience of calculations, the weights are distributed in such a way that their sum is equal to one.

3. Each factor is given an assessment of the degree of its attractiveness for the company in the industry being assessed. It is determined depending on what opportunities it contains to achieve the company’s goals. The assessment is carried out on a five-point scale: 5 - the most attractive, 1 - the least attractive parameter. For example, if a company aims to expand its sales volumes, but the industry is not growing, then the industry growth parameter will receive a score of 1. This will mean that it poses a threat to the company.

4. A generalized assessment of market attractiveness is calculated. The assessment of the relative importance of each factor is multiplied by the corresponding assessment of its attractiveness and all the results obtained are added up. The total results in an integral assessment of the attractiveness of the industry. The maximum industry attractiveness rating can be 5, and the minimum - 1.

A conditional example of calculating the attractiveness of an industry is given in Table. 6.2. An overall rating of 4.5 indicates that this branch of activity (production of this product, service) is very attractive for the enterprise.

Table 6.2

CALCULATION OF INDUSTRY ATTRACTIVENESS

The integral (general) assessment of the competitive position in the market of each product produced by the enterprise is calculated similarly to the calculation of the market attractiveness assessment. Essentially, it reflects a cumulative assessment of the strength of the enterprise in the analyzed type of activity in the market, its strengths and weaknesses in comparison with competitors. When conducting a strategic analysis of an enterprise's business portfolio using the McKinsey methodology, management also needs to determine whether to evaluate each product (line of business) based on the same group of factors or on the basis of the most significant factors for the market of each product. Using the first approach creates a level playing field for comparing the products of an enterprise's business portfolio and determining strategies in this area. The second approach can make it possible to draw a more accurate conclusion about the competitive position of the enterprise in the market for a given product. An assessment of the strategic position in competition of each product (line of activity) determines its place along the horizontal matrix and shows whether it occupies a strong, average or weak position on it.

After assessments of the attractiveness of the market and the competitive position of the enterprise’s products have been obtained, a positioning matrix for each type of product is constructed in the coordinate system “attractiveness of the industry/competitive position of the product.” Each of the axes is divided into three equal parts, characterizing the degree of attractiveness of the market (high, average, low) and the position of the enterprise’s products on it (good, average, bad). The intersection of the lines coming from them forms nine squares, or matrix fields. Each product of the enterprise, indicating its market share, is placed in one of them in accordance with the estimates obtained. The total sales volumes of products of this type in the industry and the market share of the enterprise, as we noted earlier, are depicted in the matrix for clarity in the form of a circle with the sector of the enterprise highlighted in it. The area of ​​the circle is determined based on the general proportions of sales volumes of all analyzed products of the enterprise.

What do the results of the analysis indicate? If, for example, a company's product is in the most favorable upper left cell, it can be said to have a good competitive position in a very attractive market and already has such and such a share of it. This means that the company in this area has favorable growth prospects and can pursue this strategy. On the McKinsey matrix model shown in Fig. 6.4 shows possible strategic decisions for products that fall into the corresponding cells of the matrix.

Rice. 6.4. McKinsey matrix model

By products included in three cells of the upper left part of the matrix,(maybe it's better like this:in three cells with high market attractiveness) the enterprise must strive to apply a development strategy. They have good competitive positions in attractive industries, and therefore are the highest priority for investment. Next in priority are products placed in three cells running diagonally from the lower left to the upper right corner of the matrix. Activities that appear in the upper right square (they are called “Question Mark”) may have a good future, but for this the company must make considerable efforts to improve their competitive position. Products in the lower left square are one of the important sources of cash. They are important today for maintaining the normal life of the enterprise, but they may die, since the attractiveness of this line of business is low.

For departments whose products occupy three cells in the lower right corner of the matrix, ,(maybe it's better like this:three cells with low market attractiveness) typically recommended strategies are harvesting or pruning. These types of activities are in an undesirable position for the enterprise and require fairly rapid and effective intervention in order to prevent possible serious negative consequences for the enterprise.

The McKinsey matrix can be used in the same directions as the BCG matrix:

To determine the prospects for certain types of products or services, areas of activity or divisions of the enterprise and make strategic decisions on them,

To form a business portfolio of an enterprise and optimize it;

To substantiate strategic decisions on the distribution or redistribution of enterprise resources allocated to various types of activities;

To conduct negotiations between senior management of the enterprise and heads of departments and make decisions on the amount of investment in a particular area of ​​activity.

From the point of view of its use as a tool for strategic analysis of the internal environment of an enterprise, it preserves almost everything dignity Boston matrix, but represents its more complex, flexible and detailed form. Its advantages include taking into account the largest number of factors significant for the enterprise, using, along with high and low, also intermediate average estimates, highlighting areas for using the enterprise's resources that are most likely to lead to the strengthening of its strategic positions.

To the main shortcomings McKinsey matrices ( some of them are also characteristic of the Boston matrix) can be attributed to:

It is based on an analysis and statement of what has been achieved and cannot, without additional research, give a similar picture for the future, take into account the impact of changes in the external and internal environment of the enterprise;

With multi-product production, it loses its advantage of clarity or requires separate consideration of individual product groups;

More complex and time-consuming to construct compared to the Boston matrix;

When preparing the matrix, it may be difficult to find relevant information on competitors' products, for example, their cost and profitability, which is not included in statistical reporting, as well as in balance sheets and annual reports of enterprises. For successful use, the matrix requires good knowledge of competitors, the market, fairly accurate positioning of the enterprise’s products on it, but does not provide analysis tools suitable for this;

The matrix is ​​focused on the financial and product strategies of the enterprise, while strategies in other areas of activity are no less important for it: in production, technology, personnel, management, investments, etc.;

Does not exclude subjective, inaccurate assessments of various significant factors, which can lead to the adoption of incorrect or less profitable action strategies.

(will go to the section on organizations) One of the varieties of the considered approach can be considered the McKinsey 7-C model, which draws attention to the 7 main internal factors of an organization that influence its activities. These include: strategy, sum of skills, shared values, organizational structure, systems, company employees, style. The relationship between these factors is presented in Fig. 6.2. This representation of the model is based on the idea that the chosen strategy controls all the selected elements of the organization and corresponds to its goals.

.

The significance of the McKinsey 7-C model is associated primarily with the fact that it shows the importance for strategic planning of not only the development of financial indicators, but also taking into account the quality of work and qualifications of employees, as well as human relations and personal needs of organization members, reflected in concepts of “shared values” and “organizational culture”. The concept of “structure” in it implies not only the organizational structure of the enterprise, but also the quality of the division of labor. The concept of “system” covers all accepted technologies, including management ones.

ModelP1 MS(we will include it with reference to Petrov, then SVOT)

All models of strategic analysis (choice) that were discussed above are based on economic and intuitive analysis. None of them has an explicit formalized

solutions. A model in which a formalized approach is implemented

in strategic analysis (selection), is PIMS (“Impact

on the profit of the marketing strategy"). Within the framework of the regression model, not only the factors that are most closely related to profitability are determined, but also the degree of their relative influence as variables on the objective function.

Initially, the model was based on information from General

Electric. Then, in addition to this information, data from many other corporations was added. Moreover, for project management

functioning of this model, the Institute of Strategic

planning. Number of participants (companies) in this model all the time

increased, as a result of which the model database was constantly increasing.

Currently, the model database consists of materials from about 3000 agricultural enterprises from several hundred companies, mainly

North American and European. Thus, companies giving

information on their types of business (and this is data on current

technical, economic and accounting indicators of the business, the state of the market being served, the leading competitors of the enterprise, etc.), thereby increasing the representativeness of the model, and in return they receive calculated model data, which serve as the basis for strategic analysis (choice). Its essence is that

that the company, comparing the calculated model and actual data,

gets the opportunity to determine what strategic actions

must be produced to achieve success, what can be expected

from a specific strategic choice.

In the model under consideration, the target functions are accounting return on investment (ROI), determined by the ratio of income, after deducting corporate costs, to the sum of working and fixed capital at residual value, and cash flow (Cash Flow). Each business in the model is described by more than 30 factors, which, according to the ideologists of the model, have the greatest influence on the adoption of a particular line of action. All factors can be divided into (three groups of analyzed strategic and situational variables) three main blocks: competitive situation, production structure and market situation. You can name some variables in each block. The first is market share, relative market share and relative product quality, an increase in each of them has a positive effect on profitability. In the second block - the ratio of the amount of invested capital to sales volume and added value (increasing these indicators negatively affects profitability), as well as the degree of utilization of production capacity and the level of labor productivity (increasing them has a positive effect on profitability). Finally,

Rice. 6.6. Basic blocks of the PIMS model with examples of specific variables

(the “+” sign means a favorable effect on profitability, the “-” sign -

opposite effect)

in the third block - market growth indicators (positive impact

on profitability), industry capital intensity, cost ratio

for marketing to the amount of sales, the total volume of purchases (increasing them

usually has a negative impact on profitability).

In addition to calculating multiple regression equations, which

show how the objective functions will change depending on

from changes in various variables, i.e. taking into account specific strategies

in a certain market situation, a participant in model calculations

can receive four more documents.

1. The first shows what level of ROI and CF will be normal

for the given nature of the market environment, use

investment, company type and historical model

strategic actions. These calculations are based on real

past experience of business areas that were in such

same conditions. Deviations of the company's ROI from normal,

for example, it can show whether a business is doing well or poorly

in the company, what are the critical success factors.

2. The second shows strategic sensitivity, i.e. prediction

what would have changed (for different periods - short-term,

long-term), if some

strategic changes. Sensitivity shows how it will change

profitability depending on future estimates (share

market, capital intensity, labor productivity, etc.), presented

3. The third document characterizes the optimal PIMS strategy,

i.e., it predicts what combination of strategic actions

will give the best ROI, CF value.

4. The fourth block is the results of calculations using a simplified model

PIMS, which takes into account only 18 variables affecting profitability,

and not 37, as in the main model. This block contains the elements

all previous blocks, but not in such detail.

It is believed that the simplified model is important in cases where

difficult to obtain all the information needed for development

PIMS models in full.

The undoubted advantage of the model, according to many researchers, is

is the use of empirical material. However

application of PIMS data, as well as any other economic and mathematical

models, can only serve as a means of adopting

management decisions, and not as a replacement for them.

The database is being formed at the Institute of Strategic Planning,

which is located in Boston (Massachusetts, USA) and has

branches in other countries.

One of the biggest advantages of the model is that it causes

discussion and thought-provoking. Conclusions may be drawn

too hastily, but the debate always takes place at the proper level

and to the point.

The disadvantage of the PIMS model is its tendency to be somewhat mechanical

view and separation from the realities of business. Among the adherents of this

models are especially common among supporters of the technical approach

to planning, which negatively affects its reputation

in the eyes of those who build their strategy on the basis of entrepreneurial

At the same time, the undoubted advantage of this model is

the research opportunities it opens. Based on these studies

Many new ideas arise regarding various aspects

strategies.

As for the applicability of this model for Russian conditions, then

it should be said that collect the necessary and representative information

to build a similar model for Russian enterprises

is not yet possible.

SWOT-analysis

SWOT analysis is the most comprehensive strategic procedure

enterprise analysis. At the same time, in domestic literature

on issues of strategic planning and management he is not

found more reflections in contrast to the BCG matrices discussed above

and GE, as well as PIMS models. Therefore it seems necessary

reveal this method in more detail.

SWOT analysis (short for the first letters of the words: strength - strength,

weakness - weakness, opportunity - opportunity, threat - threat)

comprehensively explores the external environment and resource potential

enterprises. At the same time, special attention is paid not only

statements of facts, but the definition of “opportunities” and “threats” that

brings into the activities of the enterprise the external environment

environment, and the “strengths” and “weaknesses” arising from the available resource

potential of the primary management level. Based on the above,

SWOT analysis is a study carried out

sequentially according to the following procedure.