![]() There is a direct positive correlation between increased market share and profit.Market growth harms cash flow due to the requirement for investment in manufacturing facilities, equipment and marketing.Two key assumptions form the core of the BCG Matrix: describe the market environments in which different lines of business operate.help managers decide which businesses to consider for further investment and which to consider for divestment.The BCG Growth-Share Matrix can be used to: Several models were proposed, including the General Electric/McKinsey matrix, the BCG Matrix, with its focus on cash flow rather than profits, being one of the most popular. In the 1970s, marketing managers began to recognise that companies' shift towards more diversified product offerings required new planning models to provide a means for analysing investment opportunities. The BCG Growth-Share Matrix provides a simple tool to get a high-level overview of a corporate portfolio, acting as an input into strategic investment decision making. ![]() As firms diversify, it can be challenging to maintain a balanced portfolio and set priorities for future investment.
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