Limitations of BCG Matrix Model
Wednesday, October 15, 2008 14:45
As any other marketing theories in the field, the BCG matrix model is not perfect either. There are according problems of this theory.
Some limitations concerning the particular use of BCG include:
1. Only two dimensions – market share and product or service growth rate, are employed. These are the first limitations.
2. How to define market and how to get data about market share are also problems.
3. High market shares don’t always necessarily lead to profit at all times. It is not the only success factor.
4. Low share or niche businesses can be profitable too, which means in the real world some Dogs can be more profitable than cash Cows.
5. The model cannot reflect the growth rates of the general market and market growth is not the only indicator for market attractiveness.
6. The model also neglects the effects of synergy between different business units.
Related posts:
- BCG Matrix Model
In marketing, the BCG matrix or BCG model is one... - Products Profiling
All kinds of products have their own product life cycle,... - Why Buy into a Franchise?
Franchising is an excellent business model and has it’s fair... - Learn From Two Cows Case
What’s the difference between various social system? What’s the... - Five Problems Private Enterprises Should Avoid
The development of private enterprises are the key factor driving...
