The Boston Consulting Group (BCG) was the inventor of this portfolio management matrix. Using this growth-share approach, a company classifies all its Strategic Business Units (SBUs).
On the vertical axis, market growth rate provides a measure of market attractiveness.
On the horizontal axis, relative market share gives an indication of the company strength in the market.
The matrix is divided into four quadrants:
1. Stars: High growth products that need heavy investment. Over time, their growth slows down turning them to cash cows.
2. Cash Cows: These are low growth, high market share products. They require less investment to hold onto their market share. For instance, products from reputed companies like J&J, P&G, etc. Cash Cows support other SBUs because of their goodwill and market share.
3. Question Marks: Low market share business units in high growth markets. Investment is needed to hold their share, building them into stars.
4. Dogs: Low growth and low market share businesses and products. They generate just enough cash to maintain themselves. They are generally on their way out.
for more info Case Studies Of BCG Matrix
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