BCG Growth Share Matrix

What is BCG Growth Share Matrix?

The growth-share matrix is a type of portfolio management structure that assists companies to prioritize their businesses. It is a term coined by the Boston Consulting Group (BCG) founder, Bruce Henderson in 1968, and has since then gained popularity in the business sector. It has since been used by about half of the Fortune 500 companies and is still a well-taught business strategy to date.

Other Information

The Growth Share Matrix consists of a table split into four different quadrants with each quadrant having a distinctive symbol that represents it (dogs, cash cows, stars, and question marks). This four-square matrix has a y-axis representing the market growth rate, and an x-axis representing the market share.

• Dogs; this is when a company’s products have a low market share and a low growth rate. It is a bad investment for the company and should be sold or liquidated.

• Cash cows; this represents the low-growth and high market share of a company. It is then expected of the company to “milk” the cash cows for as long as it wants.

• Stars; this refers to products that have high growth markets and high market share. It has more tendencies to generating more revenue for the company but also incurs large expenses for the company.

• Question markets; this refers to business opportunities that promise high growth rate markets yet have low market shares.

All four of the quadrants represents a particular combination of relative market and growth. They are the;

• Low growth, high share

• High growth, high share

• High growth, low share

• Low share, low growth

Business executives using this strategy would be able to properly list out the different areas of interest of their businesses in each quadrant to help them decide where they need to channel their resources and capital to generate more revenue and cut losses. Basically, they help the companies decide what aspect of their businesses should be kept, invested or sold off.