The size of each circle should clearly match the amount of business revenue generated by that brand. So, to illustrate your values on the BCG matrix table, you can use the circle to represent each brand. These values will be represented in percentage, and you can compare them with leading companies to get definitive measures and results.Īfter competing for all the calculations, you can now plot your firm’s BCG matrix using those values. You can determine your company’s market growth rate by comparing company sales this year with company sales last year. Determine your firm’s market growth rate: This will be shown on your X-axis in the BCG matrix. Keep in mind that you can calculate relative market share in two ways: using market share or using revenue. Use the relative market share formula give above to calculate your firm’s relative market share. Calculate your firm’s relative market share: Defining the market will help better understand the unit’s portfolio position. Market definition is necessary for any BCG analysis since you will have poor classification with an incorrectly defined market. Thus, it is good to clearly define the unit to be analyzed since the selected unit will definitely have an effect on the whole analysis.
Keep in mind that a unit refers to a firm, product, separate brand, or SBUs.
This is the first step and probably one of the essential steps. Below are five steps on which to perform a proper BCG matrix analysis: BCG matrix will always be a helpful tool when used accordingly.
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