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BCG Matrix

 

The Boston Consulting group’s product portfolio matrix helps with long-term strategic planning, to help a business deliberate growth opportunities by going through its portfolio of products and to choose where to invest, to withdraw or develop products. It is also known as the Growth/Share Matrix.

It depicts a firm’s brand portfolio or SBUs on a quadrant with relative market share axis on the horizontal axis and speed of market growth on the vertical axis.

 


The Matrix is divided into 4 quadrants based on an analysis of market growth and relative market share, as shown in the illustration below.

  •  Dogs: These are products with low growth and market share. They breakeven often generating enough cash to maintain the business.
  • Question marks or Problem Child: Products in high growth markets with low market share. These are the starting point of businesses. They have the potential to gain market share and eventually become stars.
  •  Stars: Products in high growth markets with a high market share in fast-growing industry.
  •  Cash cows: Products with low growth markets and with a high market share in a slow-growing industry. Generally, they generate an excess of cash. Very little investment is needed in this case

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