Based on the analysis of the BCG matrix, a strategic plan can be developed aimed at strengthening successful products, developing promising ones, reorganizing questionable ones, and making decisions regarding products with low profitability.
Portfolio analysis is necessary to determine the balance of a company's portfolio:
The main goal is to identify incorrect risk distribution and unprofitable positions.
The analysis also helps to understand which products should be developed or cut. It is decided whether to expand the range or focus on deepening certain product categories.
To develop the necessary doctor data package projects, the company must have sufficient profit or apply for financing.
Analytical conclusions about the state of each product category will help to build long-term plans for product range and pricing policy.
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BCG Matrix Strategies
Basic strategies according to the BCG matrix for increasing market share and sales volumes include the development of a promising product group.
Increasing market share
To achieve this goal, it is necessary to invest funds so that these companies become "stars" in the market. Such companies are usually just starting out, so they need marketing and advertising activity to develop. The rapid growth rate of the company indicates constant interest in it and its products:
An increase in market share is achieved when a new product becomes widely known among potential buyers;
the company is developing a new regional market;
A marketing strategy is being developed.
All these measures are aimed at ensuring that even with the same markets and number of clients, there will be an increase in the number of their purchases and requests to the company.
BCG Matrix Strategies
To successfully deploy this strategy and effectively develop new companies, it is necessary to analyze and review the available resources. Let's say a company has 50 products in the relevant category. Initially, it may seem that it is necessary to invest in all 50 products, but with a limited budget, it is necessary to make a choice and concentrate on products with the greatest prospects. As a result of this analysis, those products are selected that have the greatest potential for growth and successful development in the market.
Increase in profits
Companies that are cash cows are characterized by constant revenue, and measures must be taken to maintain their relevance and profit growth. However, companies in this category usually transition to other types, as buyer interest tends to wane over time.
To get the maximum benefit from these companies and their products, it is useful to run promotions and offer discounts to stimulate consumer demand.
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Maintaining market share
Used in relation to "star" companies, applied to well-known and successful companies that have great popularity and recognition. To do this, they constantly invest in the development, renewal and modernization of the product range in order to maintain the interest of customers.
One way to achieve this goal is to use both traditional advertising and online advertising, including contextual and targeted advertising.
Decreased activity
For an effective "dog" strategy, it is recommended to minimize investment. Although these products do not bring profit, the company continues to spend money on their production, delivery and storage in the warehouse. If it is impossible to completely eliminate "dogs", then it is necessary to reduce investment to a minimum, that is, reduce advertising costs and stop updating their product line.