Question

Heather has been assessing a number of her firm's products using the Boston Consulting Group approach to portfolio analysis. She has been trying to assess the strength in a particular market and is looking at the sales of the product and the overall market as well as the sales of competitors. Heather is trying to determine:the product's relative market share.the market growth rate.a source of competitive advantage.the impact of population shifts on future demand.cash equivalent values for each product.Save

Answer 1

Answer:

the product's relative market share.

Explanation:

The Boston Consulting Group (BCG) evaluates the strategic position of the company's product or service portfolio, and its growth potential.

A product's relative market share is calculated by subtracting the actual market share by the total market, and then dividing the actual share over the percentage that it doesn't control. E.g. if the company's market share is 15%, it doesn't control 85%, so its relative market share = 15% / 85% = 17.65%. You can also calculate your product's position against the of the market leader. If the market leader controls 30% of the total market share, then your relative market share against the market leader will = 15% / 30% = 50%.

This information is very useful when you are trying to benchmark your product against the market leader.