SDA Professor of Strategic and Entrepreneurial Management
The BCG matrix and modified portfolio planning tools have for a long period of time occupied a fundamental position in corporate planning departments as well as in business school courses. With this contribution, I attempt to show that the BCG matrix has a number of flaws and its application is rather problematic. The Boston Consulting Group’s (BCG) growth share matrix – and its close relatives (most prominently the GE/McKinsey matrix) - is one of the best known and persistent tools in strategic management. At the height of its success between 1972 and 1982, the BCG matrix was used by around 45% of the Fortune 500 companies. In 1975, the prominent strategy scholar Peter Lorange asserted that the growth share matrix has become the common method of corporate planning.
The apparent simplicity of having reduced a complex decision problem to a two dimensional matrix was of intuitive appeal. The central assumption was based on academic research (i.e., the PIMS study) and managers located in corporate headquarters were able to show their value added for their businesses. The proliferation of portfolio planning as a resource allocation tool was accelerated by the BCG consultants and their competitors like McKinsey, and Arthur D. Little which developed similar matrixes together with their clients.Leggi tutto →