The Boston Consulting Group’s (BCG) growth share matrix enables companies to determine how best to allocate scare resources or cash flow among the markets or industries they compete in. Each quadrant – dogs, cash cows, stars, and question marks – has a recommended marketing strategy to pursue. Bubbles can be drawn around each product/service offering to show sales volume of the entire market or show the sales contribution of that market to the firm’s profits. You can go further and show where your solution’s portfolio or products are positioned on the matrix relative to the competition to help anticipate competitor moves and/or more easily determine whether to invest or divest and to what degree.
The matrix does have limitations, however. For instance, market growth and market share are not the only success factors, and ‘dogs’ (low market growth and low market share) may make more money than ‘cash cows’ (low market growth, but high market share).1, 2 Also, blank rules of what percent to invest or divest do not apply equally across the board of products and solutions.3 See the Internet Center for Management and Business Administration, Inc.article, “The BCG Growth-Share Matrix,” on NetMBA.com, Mind Tools “The Boston Matrix“, and the Management Study Guide “BCG Matrix” for more information.