Invest in them depending on the prospects, but sell them off if they do not start yielding profits. However, they have the potential for growth.
The matrix has also been criticised for suggesting that all corporations will identify units or products in the four quadrants, and that units or products will travel through all the four quadrants in their life cycles. They need to invest in more question marks to help the promising ones grow into stars.
Tata Housing was placed in the dogs category.
They demand high investments to capture some market share, but whether this cash infusion will provide returns will be known only in the future. This assumption is often true—when a firm captures a higher relative market share, it goes forward on the experience curve compared with its rivals, and secures Bcg matrix of tata tea competitive advantage and a cost advantage.
It is on the basis of these assumptions that the categorisation of business units as stars, cash cows, dogs, and question marks was envisaged. The matrix also seems to use broad definitions of market share and market growth overlooking nuances—a unit that makes moped tyres, for instance, may have a big market share in this niche segment, but only a minuscule share of the overall tyre market.
The matrix can also be used to calculate the relative market share and the market growth of a product line. A dog, for example, may be helping a question mark or a star with cash. It has been pointed out that a unit that has a high market share needs to keep investing in itself to sustain this share and, therefore, may absorb cash instead of generating it.
According to critics, the matrix ignores other factors that determine profitability. The advantages of the BCG growth share matrix are manifold.
Finally, market growth rate is only one factor that makes an industry attractive. They neither generate cash nor require investments.
Apart from assisting in decision-making on the allocation of funds among different business units, the BCG Matrix can help a corporation decide on earmarking funds for the development of its products. Applying the matrix principles, all business units start off as question marks, then become stars and cows, and finally end their life cycles as dogs.
The higher the relative market share, the higher the cash generated by the unit. Criticism of the BCG Matrix The BCG Matrix has lost some of its popularity following the development of other models, and drawn criticism for its basic assumption that a business unit with a higher market share will generate more cash.
The higher the market growth, the higher is the requirement of cash for capacity-building. It can also show the position of a business unit or product in its life cycle. A corporation can find out the relative positions of all its business units under it from the matrix.
Therefore, such units do not require cash but rather provide cash.
Boston Consulting Group (BCG) Matrix is a four celled matrix (a 2 * 2 matrix) developed by BCG, USA. It is the most renowned corporate portfolio analysis tool.
It provides a graphic representation for an organization to examine different businesses in it's portfolio on the basis of their related market share and industry growth rates.
Assaignment on bcg of tata group 1. Page 1 of 11 Topic— BCG Matrix Subject— Elements of Strategic Management Submitted to— Sandipan Sir Submitted By- Rajat Gandhi Roll No TY BBA 2. Page 2 of 11 BCG Matrix The BCG growth-share matrix is portfolio model developed by Bruce Henderson of Boston consulting Group in BCG Matrix of TATA Tata Steel, Tata Power, Tata Motors and Indian Hotels emerge as clear Stars (high market growth, high market share).
Hence, they should be retained and the investment in these companies should be increased Tata Chemicals and Tata Tea emerge as the Cash Cows (low market growth, high market share) and should be held 5/5(1). A similar academic exercise on the portfolio of the Tata Group in identified Tata Steel, Tata Motors, and Indian Hotels as the stars; Tata Tea, Tata Power, and the chemicals businesses as the cash cows; and Voltas and .Download