Conceptual models in strategic management: The Boston Consulting Group growth / share matrix
- General discussion: Common usage of models in strategic management.
- Different challenges facing managers.
- Usage of conceptual models in strategic management.
- The Boston Consulting Group Matrix explained and represented.
- Reflection and evaluation of the strengths and weaknesses of the BCG growth/share matrix.
- Strengths of the BCG growth/share matrix.
- Weaknesses of the BCG growth/share matrix.
- Reference list.
Nowadays, in a stronger context of globalisation, companies have to face more and more complex challenges such as a higher international competition, emerging markets, many economic changes or new technological progresses etc. Strategic management decisions have to be completely successful in this context, otherwise the consequences of any failure or mistake can be dramatic for companies in terms of profits or reputation. Senior executives actually have to use several conceptual models to be efficient particularly in their decision making. First of all, we will determine why conceptual models are so commonly used in strategic management. Then, we will describe and explain the BCG Growth / Share Matrix and finally, we will evaluate the different strengths and weaknesses of this conceptual model by analyzing and synthesizing the views of several authors.
[...] Tim Hannagan (2005) Management Concepts & Practices. 4th ed. U.K.: Prentice Hall. Arthur A. Thompson, Jr., A. J. Strickland III (2001) Strategic Management, Concepts and Cases. 12th ed. U.S.A.: McGraw-Hill International. Ralph D. Stacey (2003) Strategic Management and Organisational Dynamics, The Challenge of Complexity. 4th ed. U.K.: Prentice Hall. Mind Tools, The Boston Matrix [online]. Available at:
[...] To make their strategic choices or to take up their challenges, managers often use conceptual models such as the BCG Growth / Share Matrix, the SWOT Analysis, the PEST model or the Porter's five forces Analysis for example. I.B. Why conceptual models are so commonly used in strategic management? Managers have different analytical tools at their disposition to make efficient strategic decisions. Many concepts have been created to help them in their decision making process. Let's now see what can be the models used by managers and how they can contribute to strategic business thinking The first example is about the famous PEST Analysis (Political, Economic, Social, Technological and sometimes Environmental and Legal), which provides an analysis of the macro-environmental influences acting on a company. [...]
[...] The Boston Consulting Group Matrix explained and represented In the early 1970's, Bruce Henderson, the founder of the ?Boston Consulting Group?, a well-known American management-consulting firm, created the BCG Growth / Share Matrix. The purpose of this concept, which is actually a portfolio-planning model, is to help companies with analysing their business units or product lines (Ralph D. Stacey, Strategic Management and Organisational Dynamics, p. 59). The BCG Matrix concept is based on the product life cycle theory, stating that ?business opportunities moves through life-cycle phases of introduction, growth, maturity and decline? (Jonathan Sutherland and Diane Canwell, Key concepts in strategic management, p. [...]