What concepts or assumptions underlie the BCG growthshare ma

What concepts or assumptions underlie the BCG growth-share matrix? Are these concepts valid? Why or why not?

Solution

Assumptions of BCG growth share matrix are:

Some of the assumptions are practical and valid while some are not. For example, the assumption that resources can be allocated across the portfolio is not valid. It will be hard to allocate manpower across different business or different divisions. Similarly the assumption that the return dynamics is the same for each part of the portfolio is not a valid and practical assumption. Return dynamics are usually different for different businesses, different products and different divisions.