3. BCG Growth/Share Portfolio Matrix

Description and Purpose

Portfolio planning models like the BCG matrix are designed to help the analyst better understand the attractiveness or potential of a portfolio of distinct business units in a multiunit business. They developed from two places: the planning department at General Electric (GE) and the Boston Consulting Group (BCG). GE generally is credited with being the first to present a comprehensive portfolio matrix in the early 1960s.

Shortly after the initial developments at GE, BCG’s founder Bruce D. Henderson took the business world by storm with the introduction of his growth/share portfolio planning matrix (BCG matrix). Its intuitive appeal and vivid imagery combined with the appearance of ...

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