Portfolio Analysis Explained - The BCG Matrix

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Portfolio analysis allows a company to analyze and divide up their portfolio of products and/or services in two dimensions, market share and market growth. This allows firms to determine where investment and divestment should happen.
cash cows, dogs, stars and question marks.

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hi guys market with Walters world and
today we're talking about portfolio
analysis sometimes called BCG matrix r
boston consulting group matrix basically
what you do is you look at your
portfolio products so if your sony
you're looking at your your your
computer's your laptop's your TV's your
PlayStation all these things and you
start to analyze what you put them into
different groups and you base these
groups on two different criteria one is
market growth
and to you based on market share
ok so we have the quadrants here the
market growth hot market growth market
growth and market share high market
share to low market share
now the thing is you do this to analyze
which products we should put more money
into invest more because things are
going well which ones are our cash cows
that we use to fund other investments
and we were in bad economic times maybe
this is how we decide which products
need to be taken out to pasture
ok and so that's what we have here now
if we look at it we have four different
quadrants we're starting here with the
question marks
now ? products these are products or
services they're in high growth industry
but we are a very small player in it so
we don't know is it going to take off we
go so many big because there's so much
room to grow
or could it turn out that we're not
gonna make anything for it now sometimes
lot of success stories for nokia you
know what time during the wood products
and they had this little small industry
little small part of the tell the mobile
phone industry they said was just going
to work or not and they bet on that ?
about phones and help them take off it
doesn't always work that way you'll see
companies to see hey this is a really
growth industry the loan market and
circuit city below market was a really
great industry was growing so they're a
small player ended up taking them out of
business actually failed
ok because one of these loans and so we
look at these things and say ? do we go
with to make it a star or could come
down become a dog for us now the second
1i want to talk about is the star
star is a high growth industry and
you're the big-time player sony tablet
computers we're looking at the ipad that
is a star for Apple tons of people are
buying it
the market is growing and growing driver
tablets and apple is number one with the
ipad so that would be a star for that ok
these ones your invest more money into
it because it's still growing
we're going to have more production for
we've got to get out there because
products that are stars don't always
stay at stars eventually sometimes you
come out hopefully hopefully during the
cash counts
ok because a cash cow this is a product
that's in a low growth industry but
you're just a big-time market player if
you think of coca-cola classic the red
candy coat not big market growth thing
there but they make tons a cash on it so
you use them like from their cash how to
invest in their stars to help make you
more mine also to invest in their
question marks so maybe that extra money
can have that ? become a bigger player
ok and then finally you have the dogs
now the dogs these are as you see I'm
marketing professor not an artist
ok but as you see with the dogs they
have low market growth and low market
share
so basically you're in a dead industry
or not much growth industry
you're a small-time player is this
something we really want to be in or not
and usually eat the type of cup products
and services they cut when they're
looking to save money and if you're
headed to his little free advice if you
see you're working on a product or a
service department that's dealing with
the dog products time to go look for
another job
ok so just be safe and this is a rough
idea of what a portfolio analysis is you
take your products all it was out there
you start placing them on in this grid
based on market growth and market share
you see where things are so you know we
don't need to invest more which one
should i nurture just to get the cash
which ones i should get rid of so i hope
that helped you learn a little bit about
portfolio analysis if you have any
questions please leave a comment below
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