Lakhasly

2.Figure 2 Problems and solutions of subjective classification of BCG extension in spatial dimension Therefore, from a methodology perspective, there is a need to improve the subjective classification from broadly three aspects: 1) systematic classification rule; 2) customized classification scenario analysis for logic classification searching;Undoubtedly, the exploratory is needed to determine the proper/logic classification. Specifically, the limitations can be summarized from the following perspectives: 1) the distinction between high and low is highly subjective; 2) the use of BCG analysis can't help managers take into account synergies that may possibly exist among the various SBUs within the product portfolio; 3) the assumed causal relationship between market share and profitability may not truly exist.In Figure 1, four distinct products (or market situation) are identified and given by a metaphoric name, suggesting the implications that each holds for a firm's marketing strategy: cash cows (to be milked), stars (to sustain their ascendancy), problem children (to treat with caution), and dogs (to avoid) [2].The BCG matrix measures market attractiveness by market growth rate in vertical axis, and it assesses the firm's ability to compete by its relative market share in horizontal axis.2.1 BCG Matrix Analysis and Its Significance in Marketing Planning The BCG matrix (Figure 1) classifies products from the perspective of a single company and its particular products or SBUs (Strategic Business Unit).Therefore, in the positive side, portfolio models provide a systematic method for resource allocation decisions [2].Each axis is delineated in 'High' and 'Low' categories.

2. BOSTON CONSULTING GROUP MATRIX AND ITS MAIN PROBLEMS
   As a currently used strategic planning tool, both positive and downside of this tool are found.
   2.1 BCG Matrix Analysis and Its Significance in Marketing Planning
   The BCG matrix (Figure 1) classifies products from the perspective of a single company and its particular products or
   SBUs (Strategic Business Unit). The BCG matrix measures market attractiveness by market growth rate in vertical axis,
   and it assesses the firm’s ability to compete by its relative market share in horizontal axis. Each axis is delineated in
   ‘High’ and ‘Low’ categories.
   In Figure 1, four distinct products (or market situation) are identified and given by a metaphoric name, suggesting the
   implications that each holds for a firm’s marketing strategy: cash cows (to be milked), stars (to sustain their
   ascendancy), problem children (to treat with caution), and dogs (to avoid) [2].
   In the real world practice, BCG matrix methods are judged to be successful by those who use them. Haspeslagh [8]
   found that almost all respondents believed that their use of formal portfolio planning methods had a positive impact, in
   a survey of Fortune 1000 companies [3, 8]. Therefore, in the positive side, portfolio models provide a systematic
   method for resource allocation decisions [2].
   2.2 Problems with current BCG matrix analysis
   At the same time, it is noted a real problem is attached with BCG matrix analysis, i.e. easy to be misleading [9]. It is
   noted few limitations lead to this misleading. Specifically, the limitations can be summarized from the following
   perspectives: 1) the distinction between high and low is highly subjective; 2) the use of BCG analysis can’t help
   managers take into account synergies that may possibly exist among the various SBUs within the product portfolio; 3)
   the assumed causal relationship between market share and profitability may not truly exist.
   Given the focus of this paper is to further develop BCG analysis from a methodology perspective, subjectivity becomes
   the major concern of this research. The problems of subjective classification and their impact on strategic planning can
   be found from few perspectives, which are shown in Figure 2.
   From previous researches, it is found managers often neglect to use a rational economic approach. Instead, they use
   unstructured judgmental processes, which is based on their decisions on power or emotional factors [10]). As a result,
   two different managers can recommend two different resource allocation strategies given the same scenario. Under this
   situation, BCG matrix, may lead managers to make decisions that are less rational than those they make without the aid
   of BCG analysis.
   Alternatively, the distinction between ‘High’ and ‘low’ may need to be established with the consensus. Undoubtedly,
   the exploratory is needed to determine the proper/logic classification.
   Figure 2 Problems and solutions of subjective classification of BCG extension in spatial dimension
   Therefore, from a methodology perspective, there is a need to improve the subjective classification from broadly three
   aspects: 1) systematic classification rule; 2) customized classification scenario analysis for logic classification searching;