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The market growth rate is about how much is the industry growing, e.g., how much is the beverage division growing every year? On the horizontal axis, the relative market share serves as a measure of company strength in the market.

On the vertical axis, the market growth rate provides a measure of market attractiveness. BCG Matrix helps the company do the portfolio analyses to understand where the market is trending and where they should allocate their limited number of resources.īCG matrix consists of two axis: The X-axis and the Y-axis, and the two factors that go into the BCG matrix are relative market share and market growth rate. It will help in terms of your planning because you want to focus your resource is on the products that are doing really well, and that is what portfolio analysis is all about. Therefore, when you do portfolio analyzes, you try to figure out which one of these products has a higher demand? Is the market growing, or is the demand becoming stagnant or declining? But then they also need to make business strategies relevant to specific businesses division also called Strategic Business Unit (SBU)

Limitations of BCG Matrix / Problems with BCG Matrix Approachesįor big corporations, they have a corporate strategy that is a strategy for the entire corporation.

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