BCG Matrix

The growth share matrix developed by the Boston Consulting Group is known to be among the best strategic management tools.


Prescriptions of the BCG Growth Share Matrix








The aim behind star businesses is protecting the market shares and to get a bigger market growth chunk as compared to their competitors. These businesses are known to become cash cows ultimately.

Cash Cow



Categorized by generation of increased cash and profit. Remaining cash needs to be redistributed among other businesses once the costs for running the business and protecting the market share have been taken care of.

Question Mark



Cash requirements for such units are higher. So companies need to do whatever it takes to divest or increase the market share quickly.




Poor profits are generated while the cash requirements are normally a bit higher in comparison to the generated cash. For improving their performance, companies need to minimize their assets’ potion that stays within this category. This may be done by getting focused on special segments, liquidation or harvesting by maximizing cash flow or cutting costs by divestment.

The autonomous divisions within a company normally establish its business portfolio. When the divisions of a firm compete within unlike industries, there is a requirement for developing separate strategies for each of the businesses. The internal-external matrix and the BCG matrix are especially designed for enhancing the efforts of a firm while formulating strategies. 
Any differences among the numerous divisions of a company on account of industry growth rate and relative market share position are graphically portrayed by the BCG matrix. It allows multidivisional companies to manage their business portfolios by examining the industry growth rate and relative market share position of all the divisions in relativity to the company’s other divisions. The relative market share position may be referred to as the ratio of the own market share of a division in an industry to the biggest competitor’s market share position within the same industry. 

The Below Table Explains:-

BCG 4 Divisions.

The major benefit of the BCG Matrix

Using the matrix to strategize

Application of the BCG Matrix

How does the BCG model work?

Limitations of the BCG matrix model

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