The BCG Matrix captures the main outcomes of market growth and market share. This example is fully explained in Chapter 10 of Lynch Strategic Management.
MARKET GROWTH
Typical market growth % per year | Market growth classification | Company impact on… | |
Cash flow | Profits | ||
+20% to +200% | Embryonic | Negative | Loss |
+5% to +20% | Growing | Negative | Possible profit |
+1% to +5% | Mature | Positive | Good |
-10% to +1% | Ageing | Should be positive | Should be in profit |
Grow, decline, grow, decline, etc. | Cyclical | Varies but should be positive in growth phase | Varies but should be in profit in growth phase |
MARKET SHARE
Typical market share % | Market growth classification | Company impact on… | |
Cash flow | Profits | ||
1% to 4% | Weak | Possibly positive in short term | Possible profit in short term |
5% to 10% | Viable | Probably positive | Probably profitable |
10% to 30% | Strong | Positive | Positive |
31% and above | Dominant | Positive | Attractive |