Week 2 EOC : Boston Consulting Group - Video Game

Boston Consulting Group is a portfolio planning method that helps companies and people interested know where big corporate and items like video games for example fall on this four square chart. “Using the now-classic Boston Consulting Group (BCG) approach, a company classifies all its SBUs according to the growth share matrix as shown in Figure 2.2. On the vertical axis, market growth rate provides a measure of market attractiveness.”(Page 43, Armstrong & Kotler (2011). Marketing: An Introduction, 10th Ed. Prentice Hall Publishing). The four parts of the matrix is Star, Question mark; which are the high points of the chart meaning the game console is doing great in the market. Then there’s Cash cow and Dog, and these are the low point meaning that it’s not really working out so much either because of price or it’s just out of date. Some were once at the top and over the generations it could’ve died because of something new taking its place or like I said over generations, meaning everyone changes in the life time therefore likes change into dislikes. “The 10 circles in the growth-share matrix represent a company’s 10 current SBUs. The company has two stars, two cash cows, three question marks, and three dogs. The areas of the circles are proportional to the SBU’s dollar sales. This company is in fair shape, although not in good shape. It wants to invest in the more promising question marks to make them stars and to maintain the stars so that they will become cash cows as their markets mature.”(Page 44, Armstrong & Kotler (2011). Marketing: An Introduction, 10th Ed. Prentice Hall Publishing). Like for example Sony PlayStation is now considered a cash cow because it once was a hit back in 2000 or even earlier years but it has dropped down to cash cow because another competitor has pushed them down with something better with more functions and technology. “As time passes, SBUs change their positions in the growth-share matrix. Many SBUs start out as question marks and move into the star category if they succeed. They later become cash cows as market growth falls, then finally die off or turn into dogs toward the end of their life cycle.”(Page 44, Armstrong & Kotler (2011). Marketing: An Introduction, 10th Ed. Prentice Hall Publishing)