Boston Consulting Group (BCG) matrix

BCG matrix

a management tool used to examine the product portfolio of a business by determining whether each product has high or low market share (horizontal axis) in a high or low growth market (vertical axis)

BCG product names

• question mark

• star

• cash cow

• dogs

BCG question marks

products with low market share in a high growth market, they have potential to do well but need investment

BCG star

products with high market or rising market share in a growing market. they have potential to be cash cows if funded and marketed successfully

BCG cash cow

products that enjoy high market share in a low growth market. they earn the highest revenue for the business

BCG dog

products with low market share in a low growth market. they typically drain the firm’s cash flow

BCG strategies

• building strategy

• holding strategy

• harvesting strategy

• divesting strategy

BCG building strategy

used to turn ? to stars by increasing investments in promising products

BCG holding strategy

investments needed to maintain high market share and sustain consumer demand. if they maintain market share then they can become cash cows

BCG harvesting strategy

used to milk cash from best selling products to fund / finance investments in stars

BCG divesting strategy

when poor performing dogs are phased out of the market as they reach the last stage in the product life cycle