Boston Consulting Group and Internal-External Portfolio Matrices Essay

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The Internal-External (IE) Matrix is comparable to the BCG (Boston Consulting Group) Matrix in that both tools represent organizational divides in a schematic diagram, which is why they are both referred to as portfolio matrices. In both the BCG and IE Matrix, the size of each circle shows the proportion of sales contribution of each division, whereas pie slices disclose the percentage profit promotion of it. Nevertheless, the BCG Matrix and the IE Matrix have several significant differences. One of the key distinctions to note is that the axes are different. The BCG matrix is a tool for calculating market growth and market share (Hossain & Kader, 2020). The IE matrix is a computed number that represents a collection of external and internal variables. These features indicate that the IE matrix needs more business data than the BCG matrix. While the BCG matrix has single-factor numbers for each axis, the IE matrix has multi-factor figures (Hossain & Kader, 2020). Because the IE Matrix has a broader meaning, strategists frequently utilize the BCG and the IE Matrix to analyze their situations and formulate plans.

In addition, the IE Matrix requires more division information than the BCG Matrix; moreover, each matrix has various strategic ramifications. As a result, multidivisional business strategists frequently use the BCG Matrix and the IE Matrix when devising alternate plans (Hossain & Kader, 2020). Developing a BCG Matrix and an IE Matrix for the present and then developing projected matrices to represent future expectations is frequent. This before-and-after study predicts how strategic changes will affect an organization’s portfolio of divisions.

Reference

Hossain, H., & Kader, M. A. (2020). International Journal of Contemporary Research and Review, 11(10), 21899–21905. Web.

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IvyPanda. 2023. "Boston Consulting Group and Internal-External Portfolio Matrices." June 11, 2023. https://ivypanda.com/essays/boston-consulting-group-and-internal-external-portfolio-matrices/.

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