BCG Marketing Matrix

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1 BCG Marketing Matrix Kaitlyn Kemp Bellevue University BHMC 353 Marketing Healthcare Services Adj. Professor Quick January 14 th , 2023

2 BCG Marketing Matrix The Boston Consulting Group (BCG) Marketing Matrix is a strategic tool used to categorize products or services based on market growth rate and relative market share. This paper explores the application of the BCG matrix to Family Medical Group (FMG), a family practice in Dallas, Texas. The BCG analyzes how the matrix characteristics affect FMG's internal and external marketing efforts. FMG consists of 4 physicians, four registered nurses (RN), two medical assistants (MA), and two front desk support staff. This analysis aims to assist FMG in identifying departments or services for investment and those that may require reconsideration or discontinuation. BCG Matrix The BCG matrix categorizes products or services into stars, cash cows, problem children, and dogs based on market growth rate and market share. Understanding how these characteristics affect FMG's internal and external marketing efforts is crucial for strategic decision-making. Focusing on stars and cash cows enables a company to generate revenue and uphold its market position while investing in problem children, which can produce new market share. However, dogs may require phasing out or divestment to free up resources for more profitable products or services. Debrecht and Levas (2014) explain, "The business portfolio is a useful management tool that has been used to analyze a business unit's environment and to suggest several resource allocation strategies based on the unit's industry growth rate and the organization's relative market share/strength." This strategic approach helps maintain a competitive advantage, expand market share, and ultimately achieve long- term success. Type of Organization  The organization chose is a primary care office. Name of Organization  Family Medical Group.

3 Hours of Operation  FMG is open Monday through Thursday 8am-5pm and Friday 8am-2pm Scope of Service Line  Chronic Disease Management Program, Primary Care and Preventative Care Services, Same- Day Urgent Care Services, Smoking Cessation Program Clients Served  All age groups are served with a higher percentage of elderly and high-risk patients. Location of Clinics or Services  The location of FMG is Dallas, TX Description of Business  Family Medical Group (FMG) is a healthcare provider based in Dallas, Texas, specializing in family medicine with a team of four physicians and supporting staff. Financial Health or Position  FMG is trending profitable over the last year, which leaves opportunity for advancements. Stars The Stars represent products or services with high market growth and market share. As explained by Ryńca (2016), "They require high investment expenditures to maintain the leader's position." The departments at FMG that would use the Stars quadrant are likely to be those that offer high-demand services and generate a significant portion of the practice's revenue, such as chronic disease management. This program experiences high demand and growth due to the increasing prevalence of chronic conditions. This program has high both market share and growth potential. The Stars quadrant can be used to invest in advanced technology to offer specialized programs for chronic disease management. Internal and external factors can impact how FMG can effectively

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4 market its star products, so it is essential for the company to continuously monitor and adapt its marketing strategies to stay ahead of the competition. Cash Cows Cash cows have a high market share but low market growth. A cash cow is considered the financial source for other business units in the same company. As Anantachart (2005) explained, "The brand in this stage itself needs relatively little investment to generate market share due to the low growth rate of the market." The cash cow's quadrant at FMG is the primary care and preventative care services, such as annual checkups and vaccinations. These services generate predictable revenue and are essential for maintaining patient health. Internal and external factors, including changes in healthcare policies and shifts in patient preferences, require a proactive approach to marketing. Problem Children Problem children, also known as question marks, have a low market share but high market growth potential. An example of a problem child at FMG is Same-Day Urgent Care Services. While urgent care services are essential, they are classified as problem children due to intense competition in the local healthcare market. Internal and external factors, such as competition and regulatory changes, affect the success of these investments. For example, implementing telemedicine services could help improve access to care for families living in rural areas while reducing the cost of care for both the patient and the healthcare provider. Özemre & Kabadurmuş (2020) explains, "The BCG matrix recommends investing in "question marks" if the product has the potential to move into stars (or divesting, otherwise)." Dogs Dogs have low market growth and market share and may not be worth investing in. FMG's Smoking Cessation Program is in the Dog quadrant, which is unlikely to experience massive growth

5 or yield high profits. Despite efforts to promote a smoking cessation program, the demand is low, and the success rate borderline justifies the resources invested. Patients do not readily engage in the program, and the return on investment is limited. Due to the limited demand, FMG should carefully consider the future of the Smoking Cessation Program. If discontinuation is under consideration, transparent communication with patients is essential to manage expectations. Conclusion In conclusion, analyzing the BCG Marketing Matrix's application to Family Medical Group (FMG) reveals strategic insights for its various departments. Categorizing them as Stars, Cash Cows, Problem Children, and Dogs informs decisions on resource allocation and investment. High-demand services like chronic disease management (Stars) offer growth opportunities, while stable revenue comes from primary care and preventative services (Cash Cows). Same-Day Urgent Care Services (Problem Children) require efficiency improvements amid local competition. The Smoking Cessation Program (Dogs) may consider discontinuation due to low demand. Aligning internal and external marketing efforts with these categories ensures FMG's competitiveness, responsiveness to market trends, and continued success in healthcare. Transparent communication with patients is crucial for managing program changes.

6 References Anantachart, S. (2005). Integrated Marketing Communications and Market Planning: Their Implications to Brand Equity Building. Journal of Promotion Management, 11(1), 101–125. https://doi.org/10.1300/J057v11n01_07 Debrecht, D., & Levas, M. (2014). Using the Boston Consulting Group Portfolio Matrix to Analyze Management of a Business Undergraduate Student Program at a Small Liberal Arts University. Journal of Higher Education Theory and Practice, 14(3), 65-69. http://ezproxy.bellevue.edu/login?url=https://www.proquest.com/scholarly-journals/using- boston-consulting-group-portfolio-matrix/docview/1566912692/se-2 Özemre, M., & Kabadurmus, O. (2020). A big data analytics based methodology for strategic decision making. [A BDA methodology for strategic decisions] Journal of Enterprise Information Management, 33(6), 1467-1490. https://doi.org/10.1108/JEIM-08-2019-0222 Rynca, R. (2016). USING THE IDEA OF THE BOSTON CONSULTING GROUP MATRIX IN MANAGING A UNIVERSITY. Journal of Positive Management, 7(1), 70-86. https://doi.org/10.12775/JPM.2016.005

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