BCG matrix is a portfolio matrix that was designed by the Boston consulting group. It introduced the idea that a company’s business can be evaluated and plotted using a 2 by 2 matrix. It has two horizontal axes which show market share and a vertical axis that represents expected market growth. Both axes can be evaluated in terms of high or low (Robins & Coulter, 190). Based on evaluations a business can be placed in one of the four quadrants namely
Cash Cows: Products in this quadrant have low growth and high market share. Businesses in this category generate large amounts of cash but their projected future growths are limited.
Stars: These products have high growth and high market share. They are fast-growing businesses and their input to cash flow depends on their need for resources.
Question Marks: Products in this category are high growth but have low market share. Generally, such businesses are in a striking industry but have a small percentage in market share.
Dogs: The products in this quadrant have low growth and have a low market share. The businesses in this quadrant neither make nor require much cash and provide no guarantee for improvement in performance.
Boeing’s Place in The BCG Matrix
Determining the overall area in which Boeing lies overall is somewhat difficult as in the airline industry the two major competitors are Airbus and Boeing. Thus a better measure is to show the performance of the planes made by Boeing in the BCG matrix. This will help us get a clear picture.
For Boeing’s place in the BCG, the market growth can be gauged by the number of deliveries made by the company and the number of new orders taken by the company. Market share can obviously be measured through sales. The plane models that Boeing currently manufactures include B717, B737 to B777.
From the matrix, we see that except for the Dogs quadrant, the models lie in all other quadrants. However, the largest volume in terms of turnover of orders is shown by B717 but they have a lower market share and that is why they are placed in the question marks category (Malaval & Benroya, 174). The lowest growth is shown by B747 and B767 and that is why they are placed in the cash cow category. B737s have high growth as well as high market share and are the most ordered models because they are single aisled planes and ordered the most.
Global analysis has proved that Boeing has a better product portfolio than its competitors as it is considered to be a pioneer in the plane business. From the matrix, we can make an assumption that Boeing is a Cash cow because the company has a high market share although the growth is somewhat stagnant because of limited demand by the customers. Boeing can use the cash generated from B747’s and B767’s for investments in its models which are in the question mark category. This will help Boeing come up with technological advancements in order to make them more preferable to customers and thus increasing their market share.
Works Cited
- Malaval, P. and Bénaroya, C. (2003). Aerospace marketing management: manufacturers, OEM, airlines, airports, satellites, launchers. Illustrated edition. Published by Springer.
- Robbins, S. and Coulter, M. (2005).Management. Eighth edition.