We will use BCG matrix analysis to evaluate HP’s portfolio structure and present situation and then try and find the shortcomings of using this particular tool for portfolio analysis. The company under study is Hewitt-Packard Company (HP).
In this way, the same tool highlights those products that demand high investment efforts for low-growth products and that should be avoided. The scope in the long-term is to ensure value creation by combining product offerings while generating the largest amount of cash at the lowest level of capital investment. Hence it may be considered as a useful tool to counteract the substitutes and rivalry forces. The creation of value of a company, following this model, is given from the best composition of the product portfolio. It is recommended to divest/discontinue these products and use the proceeds and savings to turn Question Marks into Stars. They do not generate cash for the company, they tend to absorb it. Dogs: These are products with a low share of a low-growth market.
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