Marketing and Management: Applying the BCG Model to Business Units

This report provides an overview of the Boston Consulting Group (BCG) Model, a portfolio planning tool used to categorize a company's business units. The report details the four categories: Dogs (low market share, low growth), Stars (high market share, high growth), Cash Cows (high market share, low growth), and Question Marks (low market share, high growth). It explains the strategic choices associated with each category, such as divestiture, retrenchment, product development, and market penetration. The report uses examples like SAAB, Rovio, Procter & Gamble, and M&S lingerie to illustrate how the BCG Model can be applied to real-world business scenarios. It emphasizes the importance of analyzing each brand or Strategic Business Unit (SBU) to determine the appropriate investment or divestment strategies. The report concludes by highlighting the model's role in helping companies make informed decisions about resource allocation and strategic planning to maximize returns.

Running head: MARKETING AND MANAGEMENT
Marketing and Management
Name of the Student
Name of the University
Author note

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Boston Consulting Group Model categories
Boston Consulting Group Model (BCG Model) is a portfolio planning model that is
founded on the deduction that a company’s business units could be characterized into four
categories:
 Question Marks
 Stars
 Cash Cows
 Dogs
1. Dogs – These products hold a low market share or possess and low growth in the market.
Generally, they are of no use investing as the generate low cash returns. However, some
dogs might be profitable if continued for a long period of time. Thus it is important that
deeper analysis is performed of each brand or SBU for ensuring they are unsuitable for
investment or needs to be divested (Stern and Deimler 2012).
Strategic choices: liquidation, divestiture, retrenchment
2. Cash cows – Cash cows contain the most productive brands and they need to be “milked”
so that as much cash can be extracted from them possible. These products play in low
growth markets but possess high market share. Corporates must invest in cash cows for
inducing growth and supporting them in continuing their current market share (Kiron et
al. 2013).
Strategic choices: divestiture, retrenchment, diversification, product development

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3. Stars – Stars are products that play in high growth markets and even possess high market
share. These are both cash users and cash generators. However, not all stars possess cash
flow. With more investments, stars can become cash cows and generate positive cash
flow (DaSilva and Trkman 2014).
Strategic choices: product development, market development, market penetration, horizontal
integration, vertical integration
4. Question marks/Problem Child – These are products in high growth markets and possess
low market share. These brands require much closer attention and time. They possess
market share in fast growing markets, all the while consuming huge amounts of cash and
simultaneously losing it (Haanaes et al. 2013).
Strategic choices: divestiture, product development, market development, market penetration
SBUs representing the BCG Model categories
To look at the four quadrants of the BCG model, SBUs or brand names have been used
below for representing each quadrant:
1. Dogs – The market advice generally provided for these products is to eliminate them
from the product portfolio as they extensively channel down from resources. As an
illustration, in the locomotive sector, once a car line is closed up, there still exists the
need for spare parts. Like, when SAAB reduced trade and production of new cars, they
started a completely new trade of selling SAAB parts.
2. Question marks – These products necessitate a lot of investing to push them ahead. As
such, Rovio, the creators of Angry Birds game, have many other games under their hood,
which are actually not known of.

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3. Cash cows – These products need to be extracted from as much possible. Procter &
Gamble, who manufacture Pampers nappies, also manufacture Lynx deodorants, making
the company justifiably mentioned as a cash cow company.
4. Stars – M&S lingerie are known as the go-to place for ladies under garments when the
choice or substitutes are low. M&S lingerie is still UK’s market forerunner in this
segment, even in a multi-channel environment, with high growth and high market share.

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References
DaSilva, C.M. and Trkman, P., 2014. Business model: what it is and what it is not. Long range
planning, 47(6), pp.379-389.
Haanaes, K., Michael, D., Jurgens, J. and Rangan, S., 2013. Making sustainability
profitable. Harvard Business Review, 91(3), pp.110-115.
Kiron, D., Kruschwitz, N., Reeves, M. and Goh, E., 2013. The benefits of sustainability-driven
innovation. MIT Sloan Management Review, 54(2), p.69.
Stern, C.W. and Deimler, M.S. eds., 2012. The Boston consulting group on strategy: Classic
concepts and new perspectives. John Wiley & Sons.