Brief description

The BCG Growth-Share Matrix, created by the Boston Consulting Group, is a strategic tool used in business portfolio analysis. It helps companies evaluate their various business units or products in terms of their market growth rate and relative market share. The matrix positions these units in four categories - Stars, Question Marks, Cash Cows, and Dogs - assisting in decision-making about where to invest, develop, or divest.

Framework Principles

1. Market Growth Rate: Measure the growth potential of the relevant market or industry. High growth indicates emerging opportunities, while low growth suggests a mature or declining market.

2. Relative Market Share: Assess each unit's or product's market share relative to the largest competitor. High market share suggests a strong position, while low share indicates a weaker one.

3. Matrix Quadrants:

Practical Application

Scenario Walkthrough

In a company with diverse product lines, the matrix might reveal an emerging tech gadget as a 'Question Mark' needing more marketing investment, while a well-established household appliance could be a 'Cash Cow' supporting other ventures.

Tips for Implementation

Regular analysis to track market changes, focus investment on 'Stars' and 'Question Marks' with potential, and consider divesting 'Dogs'.

Sample companies

General Electric (GE) has historically applied this model across its diverse business units, identifying growth opportunities and areas for divestment.

Apply effectively uses this matrix to make strategic decisions, such as heavily investing in the high-growth, high-share iPhone (Star) while managing mature products like the iPod (Cash Cow or Dog).

Microsoft utilizes the matrix to balance its portfolio, investing in high-growth areas like cloud computing (Star or Question Mark) while maintaining its strong position in PC software (Cash Cow).