BCG Matrix in Portfolio Management

Abstract

The growth share matrix, also known as product portfolio matrix or Boston Consulting Group matrix, is a tool created with effort and collaboration by BCG partners. Alan Zakon made the first sketch and later, together with his colleagues, refined it. BCG's founder Bruce D. Henderson popularized the concept in an essay titled "The Product Portfolio" in BCG's publication Perspectives in 1970. The purpose of the matrix is to help organizations and businesses to analyse their business projects, that is, their product lines. This benefits the company allocate resources and is used as an analytical tool in brand marketing, product management, strategic management, and portfolio analysis. This article will thoroughly explain each component of the matrix and its meaning, together with a clear business case relevant to the category. Moreover, a it will also provide a critical overview of this matrix by looking into its strengths and when its best utilized against its limitations and misuses in the industry. Finally, a comparison to other similar matrices used in portfolio management, such as McKinsey matrix, etc.