**Contents**show

Determining the Relative Market Share in BCG Matrix

Hi Tareq, in order to compute your company’s relative market share (since your company has the leading market share) you need to divide your market share (92%) by the second largest market share company (6%). Here your relative market share would be 92% / 6% = 15.333.

Relative market share is calculated by subtracting a company’s market share from 100 to find the percentage it does not control. If Company Z controls 30% of its market, this means it does not control 70%. From there, the company’s market share is divided by the percentage of the market it does not control.

The BCG growth-share matrix is a tool used internally by management to assess the current state of value of a firm’s units or product lines. The growth-share matrix aids the company in deciding which products or units to either keep, sell, or invest more in.

Market share compares the SBUs sales in the current year versus those of competitors. The market growth rate is this years industry sales minus the past years industry sales.

## How do you calculate market growth rate?

Calculate market growth by subtracting the market size for year one from the market size for year two. Divide the result by the market size for year one and multiply by 100 to convert to a percentage.

Market share is the share of each player in the market at any point of time. Market growth rate is the overall growth of the market over time.

Relative market share compares the market share of a company with that of its next biggest rival. A company which has a relative Market share means that they are the market leader which eclipses their competitor by this factor.

## How do you calculate relative growth rate?

In classical growth analysis, relative growth rate (RGR) is calculated as RGR = (ln W2 – ln W1)/(t2 – t1), where W1 and W2 are plant dry weights at times t1 and t2.

Relative market share indexes a firm’s or a brand’s market share against that of its leading competitor. … These metrics are useful in comparing a firm’s or a brand’s relative position across different markets and in evaluating the type and degree of competition in those markets.

## How do you read a BCG matrix?

For simpler understanding, we look at L’Oreal’s business segments and overall growth.

- Step 1: Choose the product/firm/brand. We choose the firm L’Oreal for analysis.
- Step 2: Identify Market. …
- Step 3: Calculate Relative Market Share. …
- Step 4: Find out Market Growth rate. …
- Step 5: Draw the circles on a matrix.

## What does question mark mean in BCG matrix?

Solution(By Examveda Team)

Question mark symbolize Remain Diversified in BCG matrix. The BCG growth-share matrix is used to help the company decide what it should keep, sell, or invest more in.

Market share is the percent of total sales in an industry generated by a particular company. Market share is calculated by taking the company’s sales over the period and dividing it by the total sales of the industry over the same period. … The market leader in an industry is the company with the largest market share.

In addition, there are four quadrants in the BCG Matrix: Question marks: Products with high market growth but a low market share. Stars: Products with high market growth and a high market share. Dogs: Products with low market growth and a low market share.

## What is BCG matrix based on?

The BCG matrix is based on Industry growth rate and relative market share. BCG matrix is a framework created by Boston Consulting Group to evaluate the strategic position of the business brand portfolio and its potential.