Question

1. Does the BCG analysis offer useful implications for strategy and resources’ allocation? Explain.

Answer 1

BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and it’s potential. It classifies the business portfolio into four categories based on industry attractiveness (growth rate of that industry) and competitive position (relative market share). Hence when a business would decide upon the need for the business and its chances in the markets, the business can determine the various inputs that would be needed to reach such a level.

So when the business gains the needed knowledge about the aspects of the industry it gets a growth rate idea alongside the kind of market share it may achieve. Thus the strategy of resource allocation can be well made based on the BCG analysis. This makes the business get an idea of how much of production it would need to make, the resources needed to do it, and hence get plans for resource utilization. Hence the benefits that the business gains with such forecasting of market needs and share that it may achieve with the opportunities ahead is been determined to allocate the needful and make the operations and organizational behavior likewise to meet them.