To form the BCG matrix we will first study the different portfolios that HP has and their performance over 2007 vis-à-vis their competitors and market leaders. We will use BCG matrix analysis to evaluate HP’s portfolio structure and present situation and then try and find the shortcomings of using this particular tool for portfolio analysis. The company under study is Hewitt-Packard Company (HP).

In this way, the same tool highlights those products that demand high investment efforts for low-growth products and that should be avoided. The scope in the long-term is to ensure value creation by combining product offerings while generating the largest amount of cash at the lowest level of capital investment. Hence it may be considered as a useful tool to counteract the substitutes and rivalry forces. The creation of value of a company, following this model, is given from the best composition of the product portfolio. It is recommended to divest/discontinue these products and use the proceeds and savings to turn Question Marks into Stars. They do not generate cash for the company, they tend to absorb it. A BCG can also map the expected development of your products and services.Dogs: These are products with a low share of a low-growth market. The BCG visualises the current and potential market impact of the products or services in your portfolio. Sometimes the best thing is just to get rid of them. Finally, dogs are products with low relative market share in a stagnant market.These should be considered strategically: do they have what it takes to be a star one day? Question marks are products with a low relative market share, but where there is a high potential for growth.

These are often old products toward the end of their life cycle. Cash cows are products with a high relative market share, but not much growth.Stars are products with a high relative market share in a growth market.Each box or quadrant in the matrix has a name: Star, Cash cow, Dog or Question mark. The matrix has two axes: the horizontal axis represents the relative market share of a product, and the vertical axis represents the market growth. BCG stands for Boston Consulting Group, the original creators of the tool. A BCG matrix is a 2-by-2 matrix you can use to classify your product or service suite.

Bcg matrix