Industry analysis of Nokia in Finland (Coursework Sample)

THE Boston Consulting Group matrix and its application
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The Boston Complex Group (BCG) matrix and its application
The BCG matrix is a four cell framework engineered by the Boston Consulting Group to gauge the strategic positioning of the portfolio of the business brand as well as its potential. According to Mohajan (2018, p.2), “the BCG Matrix plays an effective tool for strategic planning of product performance in industry and company level. It categorizes a portfolio into four segments depending on the market growth, and the relative market share of the business. A high market share relatively results in great financial returns because large productions benefit a company in terms of economies of scale. On the other hand, high market growth rates translate to high earnings and also huge spending. Fundamentally, this matrix helps companies determine whether they should invest, de-invest or halt a product altogether.
Components
Four components make up this 2 by 2 matrix and are a representation of how products are broken down in the model.
Dogs represent the good which have a low market share and operating in a stagnant or slowly expanding market. These products are not worthy of investment as they generate minimal income. For this reason, they should be done away with. Overall, the products have low profit margin, low market share, and have a stagnant market thus are not beneficial (Jurevicious, 2011). Since they are an obvious cash traps for any business, they are mostly discarded.
The cash cows represent the goods that have been on the market for a while and have reached the maturity stage of the product lifecycle. In the matrix, this product scoops a high market share, limited growth, reasonable margins, and low costs. In this case, the production line is significantly recouped and there is minimal investment in marketing. In this segment, a company has an only option of optimizing profits through cost reduction and process optimization.
The star is referred to as the product that is on its initial stages in the product lifecycle. This product has high margins because it is still attracting new customers and the marketing is significantly high. For a company to earn huge profits in this quadrant, it should invest in product development. For this reason, the market strategy that is suited for this product is gaining an expansive market share.
The question mark segment represents the product whose future is not certain. Although the market growth may be high, the market share is extremely low. The company should make a choice between upgrading the product to a star level or letting it flow down to the dog level. The viable product strategy in this case is to focus on the growth to convert the product into a star or save costs and convert it into a cow.
Application
The BCG matrix is created to help businesses with strategic planning regarding their investments. The comparison between market share an