BCG Matrix (Boston Consultancy Group Matrix) Examples

(Case Study Number One)

The

BCG Matrix (Boston Consultancy Group Matrix)

helps to analyze and plan the position of your products in the next five years. So it could be applied to Companies, Business Units, Group of Products and for individual products.

The following case study is from my imagination to help you in understanding how to apply the B.C.G. Matrix very well.

In this case study, I will create example to analyze your product position from competitors’ products. In another case study, I will apply the B.C.G. matrix on analyzing the company position for all its products.

BCG Matrix Examples (Boston Consultancy Group Matrix Examples): Case Study:

Let’s say you have a company called “SuperCola” which is responsible for production of Cola Products to the end consumers.

Your company product is also called “SuperCola” which have achieved 40% market share in MAT 2009 (for 12 months assessment), and 50% growth rate in the last 12 months.

You have 5 competitors in your industry:

CocaCola; which have achieved 30% market share for the last 12 months.
Pepsi; which have achieved 10% market share for the last 12 months.
BeCola; which have achieved 5% market share for the last 12 months.
ColaHero; which have achieved 10% market share for the last 12 months.
KokaKola; which have achieved 5% market share for the last 12 months.

The Market Growth Rate is 20% of all Cola Products Market.

The growth rates of your five competitors are:

CocaCola; 15% growth rate.
Pepsi; 20% growth rate.
BeCola; 40% growth rate.
ColaHero; with 10% growth rate.
KokaKola; with 10% growth rate.

The answer of the above Case Study of BCG Matrix:

1. Who is the biggest competitor for you in market share?

The highest competitor’s market share is “CocaCola” Brand. Then we are going to compare all products’ market share to this CocaCola market share. We are going to put CocaCola Market Share on the vertical axis of the BCG Matrix.

CocaCola Market Share is 30%, so as I explained in other articles about BCG Matrix, I am going to balance any product ration to be (any product Market share: 1 (which is the CocaCola Market Share)).

Please note that the biggest competitor’s market share for you doesn’t mean that competitor should have higher market share than you, because the theory says “The Biggest Competitor for you in Market Share” and not said “The Biggest Product Market Share among all products”

Don’t worry I will explain more now:

2. Calculating the Relative Market share for each product:

Relative Market share of SuperCola:

Relative market share of SuperCola to CocaCola = 40% to 30% = 40:30 = 4:3.

But as I said, we should make the biggest competitor market share = 1, so the Supercola Relative Market Share is 1.33 (for SuperCola): 1 (for CocaCola).

Let’s do the same example for the other products:

Relative market share for pepsi:

Pepsi market share = 30%, then the relative market share of pepsi = 10:30 (to CocaCola Market share) = 1:3, and by doing the same exercise we did above, the relative market share of pepsi = 0.33: 1 (CocaCola Market share).

Relative market share for Becola = 5:30, and after balance = 0.16: 1.

Relative market share for ColaHero = 10: 30, and after balance = 0.33:1.

Relative Market Share of KokaKola = 5:30, and after balance = 0.16: 1.

3. How to understand the growth rate for all of the products in BCG Matrix Model Diagram?

Because this case study is applied to analyze your product position from competitors products (and not analyzing company products as products portfolio), so we will put the Market Growth on the horizontal axis and products growth rate will be drawn along the horizontal axis without making balance (the Relative Growth Rate isn’t calculated in BCG Matrix).

Example: The horizontal axis will be the market growth rate of all Coca Products, which is 20%. Then any product growth rate above the 20% (as SuperCola , and BeCola Brands) will be above the line (horizontal line) and any product growth rate below 20% (as CocaCola, CocaHero and KokaCola Brands) will be below the horizontal line. In this case; Pepsi Brand will be drawn on the horizontal line (because it’s the same growth rate of the market = 20%).

Let’s put the previous data summarized:

SuperCola= 1.33 Relative market share & 50% growth rate.
CocaCola=1 market share (as biggest competitor market share) & 15% growth rate.
Pepsi=0.33 relative market share & 20% growth rate.
BeCola=0.16 relative market share & 40% growth rate.
ColaHero=0.33 relative market share & 10% growth rate.
KokaKola=0.16 relative market share & 10% growth rate.