Strategy
BCG growth-share matrix
Last reviewedWhat is BCG growth-share matrix?
Places each business unit by market growth rate and relative market share: stars (high growth, high share), cash cows (low growth, high share), question marks (high growth, low share), and dogs (low growth, low share).
When should you use BCG growth-share matrix?
Portfolio questions: which businesses to invest in, keep for cash, fix or sell.
What are its limits?
Only two measures, both hard to define well. It ignores profitability differences, links between units, and markets where share does not bring lower cost.
How do you tailor it to a case?
Use it as a first sort, then check each unit's actual profit, cash needs and fit with the group before recommending.
Where does it come from?
Bruce Henderson, Boston Consulting Group, around 1970.
Use a framework as a source of ideas, then put a structure built for this specific problem on the table. Reciting a framework by name is a common way to lose marks.