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In this session, you learnt about the following:

● Importance of analysing a company's product portfolio ● Understanding the BCG matrix ● Utility of the BCG Matrix ● Applications of the BCG Matrix ● Imperatives for implementation of the BCG Matrix

In this segment, you learnt that most of the companies have a portfolio of products with different market shares and different growth rates because the product portfolio of companies determines the cash flow generated and required by the company wherein some products generate cash and some need cash.

To analyse their product portfolio, companies use the BCG Matrix, which is also known as the growth-share matrix.

Then, you learnt about some of the benefits of the BCG matrix, which are presented in the image given below.

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Next, you learnt more about each quadrant of the matrix in detail.

You started with learning about Pets.

Next, you learnt the following about Question marks:


After that, you learnt the following about Stars:

These products have a high market share and a high market growth rate. As the company has a high market share, these are typically not dependent on other products for cash and can sustain themselves. Since they are growing categories, there is usually a lot of competition. Hence, such products often need investments if the company wishes to maintain its high market share. Stars can eventually become cash cows or question marks depending on their market share and market growth rate.

The last one is Cash cows.

Next, you learnt about some of the utilities of the BCG matrix, which are presented in the image given below.


In this segment, you learnt more about cash cows with the help of Amazon’s example.

You learnt about some of the cash cows for Amazon and the reasons for this. These cash cows are as follows:

● AWS ● Kindle

AWS is the biggest revenue generator for Amazon with a high market share but a low market growth. It generates enough cash that the company can leverage in other businesses.

Next, you learnt that apart from AWS, Kindle is also a cash cow for Amazon. It was a huge success when it was first launched in 2007. The product has a high market share but a low market growth rate. It does not need any further large investment and is a cash generator for Amazon.

In this segment, you learnt about the next quadrant and some of the Pets for Amazon as below:


Amazon launched the Fire Phone that allowed customers to visit retail stores, scan a product, compare its price and buy it online through Amazon. The company did not realise that people would not like to carry an additional device while shopping only to check product prices on Amazon. So, it became a Pet for Amazon.

Next, you learnt that Amazon always explores new products. Amazon tried entering into the food delivery market in India, but owing to FDI regulations, in spite of investing a large amount, the company had to pause it. So, this became a case of Pets for Amazon.

After learning about cash cows and pets, you learnt about Stars in more detail. You learnt about some of the stars for Amazon and the reasons for it. Some of the stars for Amazon are as follows:

The reason why Alexa is the Star for Amazon is below:

Amazon has high market share and high market growth for Alexa. Alexa is a virtual assistant AI technology and the brain behind Amazon Echo devices. Amazon is investing a lot of money in Alexa to develop it further.


The reason why Prime is one of the stars for Amazon is below:

Amazon Prime is a subscription service that gives the benefit of a quick delivery, video streaming, music, exclusive access to deals etc. It was launched in India in 2011 and in an extremely short span of time, it has the largest subscriber base in India than that of any other streaming service.

Next, you learnt that Amazon is investing a huge amount of money in grocery.

Then, you understood that fashion is also a Star product for Amazon because of its huge margin and a high market share, but it has its own drawbacks because fashion trends are always changing, and people like to buy only the latest trends. Amazon is investing in its fashion business and is partnering with a large number of brands to increase its market share.

In this segment, you learnt that Amazon acquired Whole Foods, which is a question mark for the company.

Whole Foods is an organic grocer in the US and sells products that are free from hydrogenated fats and artificial colours, flavours and preservatives. Given its online business model, Amazon is still figuring out whether it should enter the retail store market and make it a Star or disinvest.

Next, you understood that Amazon does not follow the conservative approach and continues to innovate and enter new markets. The company encourages its employees to think big, be creative and develop products from the customer’s perspective.

You learnt about the BCG Matrix of Infosys to understand what the Matrix of a service industry looks like compared with that of a product company.

The cash cows for Infosys are as follows:

● IT services ● BFSI as a practice

Infosys’ IT service has the highest market share but a slow market growth, as the business has already matured. Companies wanted their IT staff to run IT operations, which gave birth to IT services.

In BFSI as a practice, Infosys has a high market share but a low market growth, with the US being the largest revenue generator.


The pet for Infosys is as follows:

Manual testing: This is now obsolete owing to increased automation and new software. Infosys is gradually phasing it out wherein the company is not signing any new contracts and fulfilling only the existing ones.

The star for Infosys is as follows:

BFSI as a product: Since the BFSI sector is growing, Infosys is investing a large amount in this sector. It started by developing Finacle and later moved to cloud technology. The question mark for Infosys is as follows: Consultancy service : Providing consultancy services by sending engineers offshore is no more a profitable business for Infosys owing to a lot of restrictions in the movement from one place to another for work. Hence, it has become a question mark for Infosys wherein in the future, it can either move to become a Star or a Pet for the company.

In this segment, you learnt about some of the imperatives of the BCG matrix, which are as follows: ● Accelerate: Companies should try to evaluate their business portfolios as frequently as

possible. ● Balance the exploitation and exploration: Companies should try to increase their question

marks to encourage a culture of innovation and extract values from pets more rapidly. ● Select rigorously: Companies should be extremely cautious while investing or disinvesting

and taking decisions based on data. ● Measure and manage experimentation, speed, cost, risk and return: Companies should

measure and manage the number and costs of question marks that they generate while maintaining a high probability of question marks to become stars.

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