BCG MATRIX Analysis
Matrix analysis is one of the most common methods for researching industry
markets. With the help of matrices, one can visually assess the market prospects
for the further presence of companies in a certain market segment. One of these
matrices is the BCG matrix (eng. BCG matrix) is a tool for strategic market analysis
and planning in marketing. Created by Boston Consulting Group founder Bruce D.
Hendersen.
Classification of 4 types of strategic market zones.
“Stars" - high growth in sales and high efficiency, scale of sales. Such segments
need to be preserved and scaled up. "Stars" bring a very large income.
"Cash Cows" ("Money Bags") - high efficiency, but low sales growth rate. "Cash
cows" must be protected and controlled as much as possible. Their attractiveness
is explained by the fact that they do not require additional investments and at the
same time provide a good cash income.
"Dogs" ("Lame ducks", "Dead weight") - the growth rate is low, efficiency is also
low, products and services, as a rule, have a low level of profitability and require a
lot of attention from managers. Get rid of dogs.
“Question marks” while low efficiency, but high growth rates of sales. In the
future, they can become both stars and dogs. If there is a possibility of transfer to
the stars, then you need to invest (cultivate, educate, make efforts), otherwise get rid of.
BCG MATRIX Analysis of “Embawood” Furniture Company
Embawood was founded in 1996 by Elshad Abbasov, the company's founder and
CEO. Founded in 1996, Embawood has chosen a customer-oriented strategy as its
guiding principle over the years and has worked extensively in this direction. The
quality system has been updated to feel the desired style of furniture. The
consulting company invited from Germany raised the quality system to a higher
level and brought "German quality" to the production in the true sense of the
word. The level of service has been raised to a higher level. Customer service line
and after-sales service system was established. Free delivery and installation
service is provided within 24 hours after the purchase of furniture in all countries.
The standard product warranty period is 2 years. The wide range of products in
the product portfolio, modern and luxurious design, quality control, after-sales
service, customer orientation allow Embawood to offer its products to foreign
countries.
The analysis of the company is presented as follows:
Stars:
These are the best products in the segment for the business because they have a
large market share and a strong pace of growth. This signifies that the investment
yields a higher return. Embawood's living room and bedroom furniture are part of
the company's BCG Matrix Star Quadrant. Statistics show that the demand for
these products is higher. Inspired by the constant demand for these products, the
company offers its customers a high quality and wide range of products.
Cash Cows:
This product is in a low-growth market with a large market share, a stage of
business known as maturity. The return on investment is strong, but the
moderate expansion indicates a smaller market share. Although the kitchen
furniture produced by the company has a large market share, the level of
development is low. This may be due to the lack of assortment of kitchen
furniture and the designs and forms offered, as well as the fact that customers
make this type of furniture to order.
Dogs:
This product uses less cash and generates less cash, implying that market share
and growth are both lower. Corridor furniture and TV stand sets belong to the
Dog Quadrant of this matrix. Currently, the population prefers glass-based stands
instead of TV stands in the form of furniture. Demand for this product is low.
Question Marks:
These products are in high-growth markets with low market share. After passing
the new stage of formation, they can become the main source of income for the
company in the future, as well as the loss of the company due to reduced
demand, lack of interest in the product, the emergence of competitors. These
products include ottomans;’
, cupboards and tables and chairs. Because customers prefer furniture in sets, the
prices of tables and chairs offered to customers in parts in the coming years may
drive them away. This can also hurt the company.