Week 2 EOC: Boston Consulting Group-Video Games

Boston Consulting Group, or BCG for short, is an approach used by various companies to organize and classify their SBU's, strategic business unit. "An SBU can be a company division, or product line within a division, or sometimes a single product or brand" (Marketing: An Introduction 43). When comes to certain products companies compare the market growth rate, “provides measure of market attractiveness,” to relative market share, “a measure of company strength in the market” (Marketing 43). By comparing this two things companies can classify their products into 1 of 4 categories: Stars high-growth high share, Cash Cows low-growth high-share, Question Marks low-share high growth, or Dogs low-growth low-share. Cash cows are the most preferred because “Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of cash that the company uses to pay its bills and to support other SBUs that need investment” (Marketing 44). Videogame companies release various consoles from at home to portable hand held systems. Since not all there systems are successful in the market Videogame Companies would most likely categorize their products by using the Boston Consulting Group approach to determine which products need more attention and which ones are not worth the investment. Playstation’s PS4 would be considered a Cash Cow it sells units but it is not rapidly growing and selling out. However, PS Vita is considered a Dog since it hasn’t really captured the attention of gamers as the company was probably hoping it would. Xbox One would’ve been considered a Star when first release beating out Playstation 4 in the console wars, but now it would be considered a Cash Cow. Not surprisingly, Xbox 360 falls into the Dog category. Until, Nintendo decides to release a newer more modified system their Wii is still a cash cow. However, Nintendo 3DS is in the Question Mark category closely falling into the Dog-house.