BCG MATRIX / BOSTON MATRIX

Created by Bruce Henderson &

Boston Consulting Group in 1970
Helping a Company make the best
possible allocations of its resources
 How can you best define BCG Matrix
• Called the BCG Growth Share Matrix
• It is a planning tool for the NEO CORPORATES
• Which is used to evaluate the strategic
position of a business brand portfolio
• Hence for Real Estate and Built Environment
one needs to understand the different asset
classes possible.
 THE MATRIX

QUESTION
STAR
MARK

CASH
DOG
COW
WHAT DO YOU UNDERSTAND ?
 What is Market Share ? How is it
calculated ?
• It’s the sales of a company measured as a
percentage of an industry’s total revenue
• Company’s Total Sales/Revenue = Market
Industry’s Total Sales / Revenue Share
The Market Share can be measured on the basis
of the revenue or sometimes the sale quantities
as well.
Current Best examples we see in case of Car
sales or Mobile Phone sales.
 How do you calculate the Relative
Market Share ?
• The Relative Market Share measures the market
share of the company in comparison to the
market share it does not control.
• Assume a company is selling 25 units out of a
total of 100 unit market across all brands, its
market share is 25%
• 75 units are out of their control, hence relative
market share will be 25/75 = 33.33%
• Relative Market Share of 33% & above are
considered to be strong as per the Market driven
managements
 What is Market Growth ?
• Market Growth in simple terms stands for the
increase in demand & sales over a period of
time.
• Market Growth rates are important in a
company to understand the direction of the
company – positive or negative
• It helps the management to see where and
what rate is the company moving forward
How to calculate the Market Growth ?
• Assume the market share of the company in
year 1 is 25% and in year 2 is 33%
• The market has grown for the company by 8%
in the overall scenario but the market growth
of the individual company is established by
33-25=8 : now 8 as a percentageof 25 is 32%
• Hence the market has grown for the company
by 32%
 HOW DOES THE BCG MATRIX HELP IN
REAL ESTATE MARKETING MIX ?
• The BCG Matrix shows the product strategy
that can be followed by a company to build a
great market share and market growth for
better profits.
• We see lot of developers building real estate
assets across residential, commercial,
industrial, hospitality and retail.
• Within these also there are streams like 4 bhk,
3 bhk, 2 bhk, 1 bhk, studio apartments, etc.
 INFERENCE
• Stars being strong generators of profit and
growth should be invested more in.
• Cash Cows have high market share hence go
full steam to benefit before competition
arrives and profitability falls.
• Question Marks have to be analyzed and can
be built to bring as Star or close down.
• Dogs should be an exit policy and such
verticals should be liquidated.