The BCG matrix was developed by the Boston Consulting Group in 1970 and is a planning tool that graphically represents a company’s portfolio of products and services in the hope that the company will decide which products it should keep, sell, or invest in. It plots a company’s offerings in a four square matrix, where the x-axis represents. This video will show you how to make a BCG Matrix in excel. This video will show you how to make a BCG Matrix in excel. 2 Microsoft Corporation’s BCG Matrix Introduction The BCG Matrix is a tool used for strategy analysis and choice process. It was authored by the Boston Consulting Group, a global private management consulting firm that specializes in strategic planning (David & David, 2017). Through the BCG Matrix, it helps the company strategists make subjective decisions to help their organization. The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio Brand Equity In marketing, brand equity refers to the value of a brand and is determined by the consumer’s perception of the brand.
Microsoft CEO Satya Nadella introduces the new version of the company’s signature product, Windows 10.
Microsoft has announced that its new Windows 10 will be a free upgrade for a wide range of current Windows users. This accompanies the company’s similar offers of free Microsoft Office apps for users of iOS and Android systems.
Windows is Microsoft’s signature product, the operating system that at one time ran the vast majority of personal computing devices, propelling Microsoft to a market dominance that the federal government sought to curtail with an antitrust action in the 1990s. MS Office featuring Word, Excel and PowerPoint has been the leading productivity suite for years as Microsoft overwhelmed early leaders such as WordPerfect and Lotus 1-2-3. The Microsoft divisions responsible for Windows and its productivity software have historically earned the bulk of the company’s profit, “cash cows” per the BCG Matrix.
So why give these products away in 2015? Is this a case of killing the cash cows (akin to liquidating the goose that laid the golden egg)?
The rationale becomes clearer with an examination of the BCG Matrix. This analysis method divides areas of a business into four categories:
- Stars: Business units or products with high growth rate and high market share. They typically require heavy investment (e.g., extensive marketing campaigns) as they increase share and solidify their success.
- Cash Cows: Market leaders with low growth rates that produce consistent income without heavy investment. They generate the money required to finance the company’s other endeavors.
- Question Marks: High growth rate but low market share. They consume cash while the company determines if they are turning into stars.
- Dogs: Low growth and low share. The name says it all.
Microsoft has treated Windows and Office as stars instead of cash cows, failing to develop true stars to stimulate or at least harness changes in consumer trends. Its best attempt to branch out has been its gaming division, dominant in its market but a frequent money-loser.
The company acted oblivious to the shift to mobile computing. In 2007, it released the disastrous, bloated Windows Vista while Apple launched the iPhone. Its belated attempt to assert itself in the mobile space, Windows 8, was also derided as clunky and blamed for accelerating the downturn in PC sales, the very product that Microsoft was trying to support with its “dual” operating system approach.
Bcg Matrix Of Microsoft Company Information
Sales of Windows have continued to decline with the drop in PC sales. Office no longer enjoys unquestioned ubiquity as consumers have found substitute products that are cheaper or even free, such as Google Docs. CEO Steve Ballmer stepped down as Microsoft was increasingly deemed a has-been, its revenue currently one-third of Apple’s.
Microsoft’s new CEO, Satya Nadella, has promised a turnaround. Microsoft’s cloud computing services and mobile devices are increasing in sales. The Windows and Office giveaways are designed to keep people using Microsoft products while introducing them to the company’s latest offerings. They may be free for many consumers now, but Windows and Office are finally being used like true cash cows, supporting Microsoft’s direction for the future.
BCG Matrix (Growth-Share Matrix) Excel Chart Creator
To achieve success, a business must have a good portfolio of products and services with diverse growth rates as well as diverse market share. Your portfolio structure is really a function associated with the actual balance in between cash flows. Higher growth products and services need cash to develop. Lower growth products and services must create extra cash. The two types are required at the same time.
Bcg Matrix Of Microsoft
The necessity that motivated this BCG Matrix concept was, without a doubt, that relating to managing cash flows. It is actually clear that among the primary indications of cash development is in fact share of the market, the other that indicates cash utilization is growth rate.
This Excel Charting Application allows Business and Marketing Managers to create BCG Charts in Microsoft Excel. The BCG Chart is created based on your business data in Excel.
