You are here

Advantages and Disadvantages of BCG Matrix

Check out Advantages and Disadvantages of BCG matrix discussed below. So let us see some information on advantages and disadvantages to know more about BCG Matrix.

Advantages of BCG Matrix are:

  1. BCG Matrix is simple and very easy to understand.
  2. BCG matrix can be used to determine and to identify how corporate cash resources can best be used in order to maximize company's profitability and future growth.
  3. BCG matrix is used to evaluate balance in the firm's current portfolio of Dogs, Question Mark, Cash Cows and stars.
  4. It also provides base management to prepare and decide for future actions.
  5. BCG matrix helps the managers to become more aware on how the services, products or business unit perform.
  6. It also helps to prioritize the limited resources in order to achive the maximum or best returns.

Disadvantages of BCG Matrix are:

  1. BCG matrix is costly to conduct.
  2. BCG matix needs highly experienced person or a consultant to determine industry's attractiveness and business unit strength.
  3. BCG matrix does not take into account the synergies which might exist between two or more business units.
  4. High market share is not the only success factor.
  5. The model of BCG matrix do not take into consideration small competitors that have fast growing market share.
  6. BCG matrix uses only two dimensions : Market share and Growth rate.

Explore more Information