BCG Matrix: Characteristics Of Business Strategy For Amazon

BCG matrix is a visual measurement of classifying four different market positions, stars, cash cows, dogs, and question marks. Organizations and business units are classified by their market share: how much the business unit dominant the market share, and market growth rate: how fast the entire industry increasing, in the market. This is a simple analyzing tool for consulting firms to illustrate a characteristics of business strategy of a certain company and the way how they should establish a future standpoint in a market. If a company located in “Dogs” position, their best decision may will be either withdraw from the business or switch their business to other fields in hoping to pursuit more low-risk benefits. For a company which have multiple …show more content…
They have both high market growth rate and market share. Most of the company at “stars” are low risk than the one at “question markets” but not enough stable than the “cash cows”. Amazon have already succeed to establish their fixed business strategy within wide spread market share, however, their business is still keep growing at high rate. Another characteristic is that they have a lot of competitors in the industry, such as eBay. Although their business make huge profits among the industry, they still have to put efforts on their marketing strategy to survive. Thus, they need a large amount of investments for themselves to make the business larger than others. On the other hand, the substitutes such as Walmart or Macy which may will be “dogs” in the future, are usually eliminated their business field due to the increasing popularity of Amazon. Once their market grow slower and get mature, they changed position to “cash …show more content…
Although their market growth is low, they have high market share. Their business are pretty stable and the services or products are fixed to most of the people’s life. Office software such as word or excel are most widely used computer software around the world and necessary business tools for many people nowadays. In addition, company at “cash cows” usually do not have many competitors and substitute because they dominant its industry. In addition, no other software companies can compete with Microsoft. Another characteristic of “cash cow” is that their profits are distributed to investments for “stars” and “question markets”. It is one of an important roles that “stars” have an obligation of producing cash flows to bring advanced economy. Microsoft invested a lot amount for some start up projects of new venture companies and development of software