ADAPTING THE BOSTON CONSULTING GROUP MATRIX TO ANALYZE FINANCIAL RESULTS

Abstract

Boston Consulting Group Matrix is the most famous and popular methodical tool for corporate portfolio analysis among practitioners. However, the methods of using the Matrix were subjected to numerous criticisms and the peak of popularity of this methodical tool has passed. The purpose of the article is to determine new directions for using the Boston Consulting Group Matrix (BCG) in the economic analysis of business activity. The tasks of the research are the adaptation of the classical BCG matrix to use in the conditions of incomplete information as to the market of a specific product, as well as the modification of this method depending on the objects of the study. The following research methods were used: monographic (when studying the theoretical and methodological foundations of Boston Consulting Group Matrix classical methods); dialectical, abstract and logical (for theoretical generalizations regarding the identifying the methods’ drawbacks and ways to overcome them, formulation of conclusions); graphical and tabular (when presenting research results). It has been substantiated that the use of the traditional BCG matrix method is limited due to the ambiguity of conceptual principles, methodological problems and the lack of complete information about the activities of competitors. It has been proven that inaccuracies in the analysis of the market growth rate and the relative share of individual subjects on it make it impossible to assess accurately business prospects in this area. A modification of the BCG matrix has been proposed, which distributes the assortment units of the analyzed subject of activity according to the determined reserves of profit growth. Depending on the objects of specific analysis, grouping in the modified matrix can be conducted according to individual types of products (goods, works, and services). The main problems that arise at applying the BCG matrix were specified and systematized. Ways to eliminate certain drawbacks of the traditional BCG matrix, in particular, regarding the method of calculating the indicators included in it, were determined. The modification of the BCG matrix has been proposed, which classifies types of products (goods, works or services) according to prospective profit reserves and changes in their share in the company’s profit structure. The similar matrix has been developed for the classification of buyers of goods or consumers of the company’s services. The place of the proposed modification of the BCG matrix in the economic analysis was determined. The proposed variations of the BCG matrix have an advantage in comparison with the classical version because they are based on the internal analysis of only one business entity, and not on assessing the potential of competitors. The developed modification of the analysis methodology can be integrated into the system of the complex economic analysis of any company. The results of the analysis using the modified BCG matrix can be used in financial strategic planning and in the development of the marketing strategy, in particular when planning advertising campaigns.