What is BCG Matrix?
The BCG Growth-Share Matrix compares products or business units by market growth and relative market share. The positions depend on the values and market boundaries you provide. Star, Cash Cow, Question Mark, and Dog are prompts for investigation, not automatic investment instructions.
When to use it
Use it when reviewing a product or business-unit portfolio and deciding where to invest, protect, or reconsider.
How the methodology works
Plot products or business units across market growth and relative market share to identify Stars, Cash Cows, Question Marks, and Dogs.
- Define the portfolio and the market for each product so growth and share comparisons use a consistent scope.
- Estimate market growth and relative share using the same time period and evidence standard for every item.
- Review each position alongside cash needs, competitive strength, and strategic fit before deciding whether to invest, maintain, or reconsider it.
Example: Mapping two product lines by growth and relative share
Illustrative situation: Illustrative only: in a hypothetical portfolio, one product has higher relative share in a faster-growing market, while another has higher relative share in a slower-growth market.
How to apply it: The first product would map to the Star area and the second to Cash Cow. Those labels prompt different questions about market position and portfolio role; they do not establish what the business should fund or discontinue.
Example limits: This scenario is illustrative, not evidence about a real business. Use evidence relevant to your decision for your own facts, ratings, probabilities, or financial estimates.
How to read the result
Read each position by growth and relative share: Stars are high on both, Cash Cows have high share in lower-growth markets, Question Marks have high growth and lower share, and Dogs are lower on both.
Questions about BCG Matrix
Does the Dog quadrant mean a product should be discontinued?
Not by itself. The matrix does not include every source of value, such as strategic fit, customer relationships, or shared capabilities. Treat the position as a prompt for a fuller review.
What does relative market share compare?
It compares a product's share with the relevant competitor or market leader. State the market boundary and comparison period before rating items, or the positions may not be comparable.
Next step
List the products or business units that belong in one portfolio, then rate their market growth and relative share using the same definitions.
Need a printable resource or a step-by-step method? How to choose a growth strategy. See how portfolio analysis differs from choosing a growth direction.