The history of the BCG Growth-share Matrix

Been reading about the histories of a lot of strategic models, here’s the inception of the BCG Matrix:

“It occurred to me that the savings account is the growth business – it automatically compounds, but you get no cash out of it. The bond is your stable market-share business that’s throwing off cash and an equal amount of earnings and maintains its value over time. The mortgage is the business that’s declining, and the way you should manage it is to pull cash out. Those were the three pieces of the corporate portfolio, he concluded, “but since I couldn’t imagine how to deal with three” – perhaps sensing, too, that he was one element short of some sort of elegant balance – “I added the fourth, the wildcat, meaning wildcat, well, a pure speculation, either it pays off or it doesn’t.”

Interesting roots, I thought.

The matrix is shown here: 

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A Consultant’s View on His Love Life: A BCG Analysis

Ten Trends That Are Reshaping the Retail Industry

Ten key trends are driving a profound transformation of the retail industry and its underlying economics. How will your company respond?

1. Empowered, Discriminating Consumers. With access to product information, price comparisons, and user reviews, consumers can make informed decisions—and widely share their complaints. For retailers, the bar is rising, and they must add meaningful value to what shoppers can find for themselves, both online and in stores. 

2. Ubiquitous Connectivity. With the Internet available at work, at home, and on the go, consumers will be full-time shoppers and most purchases will have some online aspect. Smartphone numbers will be in the billions by the end of this decade. 

3. Buying Local, Going Green. Shoppers want to consume in a responsible, sustainable way. They want to purchase from organic and local vendors, and want proof of product origins. But it remains to be seen whether they will pay more for green products. 

4. Explosion of Consumer Data. Points of sale, social media, corporate websites, and tracking URLs are generating an enormous amount of consumer data, but few retailers are capable of fully exploiting the potential value of this input. It will take time, because the volume of data is still growing faster than the ability to process it. 

5. New Age of Marketing. With more data on customers, their online activities, and purchasing patterns, retailers will be able to create more targeted marketing campaigns—once they figure out how to mine the insights. This will require experimentation and calibration—and consumers will have limited tolerance for misguided marketing efforts. 

6. Scientific Retailing. By applying smart algorithms and deep, data-driven analytics to the unprecedented volume of data from multiple sources, companies can optimize all aspects of their business, including inventory levels, pricing, warehouse space, assortments, shelf displays, and staffing. 

7. Growing Retailer Power. The top five grocery stores in the U.S. now have a 33 percent share of the market—up from 25.5 percent in 2000. As their spending increases, they have more clout with suppliers. But in several categories, the increased retailer power may tilt toward large Internet players or marketplaces as their growth outpaces the brick-and-mortar competition. 

8. Maturing Retail Technologies. A wide range of maturing technologies is allowing companies to streamline backroom functions and increase efficiency, helping to offset higher labor costs. While these are part of the solution for brick-and-mortar retailers, they won’t fundamentally alter the relative economics between store-based and online transactions. 

9. Blurring Boundaries Among Channels, Formats, and Brands. CVS is selling fresh food, grocery stores have in-house bank branches, and bookstores have cafés selling Starbucks coffee. Rather than thinking in terms of channels, consumers are simply opportunistic. If they have a need and can fulfill it easily and conveniently, they will. 

10.Challenged Store Economics. The rise of online buying is eroding store traffic, forcing retailers to rethink their costly real-estate assets and merchandising formats. How valuable will bricks and mortar be in the future and for what role? Dynamics will play out very differently by category and location.

BCG Global Wealth Report 2011

There has been quite some discussions on the news that “15 per cent of households in Singapore have over a million dollars in assets under management” and “Singapore is having the highest concentration of millionaire households”.

Straits Times: Singapore millionaires rise by almost 33%: Study

The report is from Boston Consulting Group, titled:

Global Wealth 2011: Shaping a New Tomorrow

Too bad the insightful report needs registration and is by invitation only. However, we can get some insights from its press release:

BCG press release: Global Wealth Continues Its Strong Recovery with $9 Trillion Gain, but Pressures on Wealth Managers Persist, Says Study by The Boston Consulting Group

Boston Consulting Group office by Carr Design Group, Perth

Boston Consulting Group office by Carr Design Group, Perth

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The Boston Consulting Group’s Perth office reveals an impressive understanding of the contribution of workplace design to business success. Skilfully executed, with an intrinsic connection to the landscape, the new design serves as a commercial tool which has the potential to contribute to employee satisfaction, the company’s recruitment success and general workplace productivity.

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A Friendship Dating to 1976 Resonates in 2012

By Michael Barbaro, NY Times, April 7, 2012
The two young men had woefully little in common: one was a wealthy Mormon from Michigan, the other a middle-class Jew from Israel.

But in 1976, the lives of Mitt Romney and Benjamin Netanyahu intersected, briefly but indelibly, in the 16th-floor offices of the Boston Consulting Group, where both had been recruited as corporate advisers. At the most formative time of their careers, they sized each other up during the firm’s weekly brainstorming sessions, absorbing the same profoundly analytical view of the world.

That shared experience decades ago led to a warm friendship, little known to outsiders, that is now rich with political intrigue. Mr. Netanyahu, the prime minister of Israel, is making the case for military action against Iran as Mr. Romney, the likely Republican presidential nominee, is attacking the Obama administration for not supporting Mr. Netanyahu more robustly.

The relationship between Mr. Netanyahu and Mr. Romney–nurtured over meals in Boston, New York and Jerusalem, strengthened by a network of mutual friends and heightened by their conservative ideologies–has resulted in an unusually frank exchange of advice and insights on topics like politics, economics and the Middle East.

When Mr. Romney was the governor of Massachusetts, Mr. Netanyahu offered him firsthand pointers on how to shrink the size of government. When Mr. Netanyahu wanted to encourage pension funds to divest from businesses tied to Iran, Mr. Romney counseled him on which American officials to meet with. And when Mr. Romney first ran for president, Mr. Netanyahu presciently asked him whether he thought Newt Gingrich would ever jump into the race.

Only a few weeks ago, on Super Tuesday, Mr. Netanyahu delivered a personal briefing by telephone to Mr. Romney about the situation in Iran.

“We can almost speak in shorthand,” Mr. Romney said in an interview. “We share common experiences and have a perspective and underpinning which is similar.”

Mr. Netanyahu attributed their “easy communication” to what he called “B.C.G.’s intellectually rigorous boot camp.”

The ties between Mr. Romney and Mr. Netanyahu stand out because there is little precedent for two politicians of their stature to have such a history together that predates their entry into government. And that history could well influence decision-making at a time when the United States may face crucial questions about whether to attack Iran’s nuclear facilities or support Israel in such an action.

Mr. Romney has suggested that he would not make any significant policy decisions about Israel without consulting Mr. Netanyahu–a level of deference that could raise eyebrows given Mr. Netanyahu’s polarizing reputation, even as it appeals to the neoconservatives and evangelical Christians who are fiercely protective of Israel.

In a telling exchange during a debate in December, Mr. Romney criticized Mr. Gingrich for making a disparaging remark about Palestinians, declaring: “Before I made a statement of that nature, I’d get on the phone to my friend Bibi Netanyahu and say: ‘Would it help if I say this? What would you like me to do?’ ”

Martin S. Indyk, a United States ambassador to Israel in the Clinton administration, said that whether intentional or not, Mr. Romney’s statement implied that he would “subcontract Middle East policy to Israel.”

“That, of course, would be inappropriate,” he added.