BCG Growth Matrix
History of the BCG Growth Matrix
The BCG Growth Matrix originated within the Boston Consulting Group in the 1960s. Its creators were BCG consultants, Alan Zakan and his colleagues.
Although more sophisticated product portfolio evaluation tools have emerged since, it is still widely used in business and taught in business schools around the world.
How the BCG Growth Matrix is Used
The value of the BCG matrix lies in its ability to help businesses segment their product portfolios in terms of priority for continuing investment. Using a simple 4 quadrant grid, products are placed according to their potential for sales growth and the external market’s potential for overall growth.
Products with low market share in low growth markets are classified as Dogs and may be discontinued or repositioned if management feels the situation is unlikely to change.
Those with low market share in a growing market are tagged as Question Marks with management needing to decide whether to allocate further resources to the product or cease production.
Products selling into low market growth sectors but with a high market share are called Cash Cows and generally provide a steady and profitable revenue stream. Therefore they require continuing support in the form of marketing and sales resources.
The final category are Stars. These are product with great potential as they have high market share in a rapidly growing market. These have the potential to become Cash Cows in the future.
BCG’s revisiting of the BCG Growth Matrix – a 2014 article that considers the ongoing relevance of this framework.
Critical evaluation of the value of the BCG matrix from a 2017 academic paper by Dag Oivind Madsen.