Boston Consulting Group(BCG) Matrix

A way of visualising the idea of product life cycle in terms of market share and growth.

The BCG Matrix
This 2×2 matrix suggests four basic marketing strategies – each product or Strategic Business Unit (SBU) is classified as one of the following:-

Cash Cow

These are SBUs that have a high relative market share in a market with low growth – i.e has entered maturity. The message is harvest profits.

Stars

These are the highfliers – SBUs with a high relative market share in a high growth market. However they still require investment to maintain market share – so they might not be as profitable as Cash Cows – they might even need more investment than they create in profit.

But these will be tomorrows Cash Cows providing market share is maintained

Problem Children or ?

These are SBUs in high growth markets – but they have a realtively low market share. To remedy this they will need very high investment. Do you invest, sell or look for a niche?

Dogs

Dogs are those SBUs with low market share in low growth markets – the market might be in decline or a prolonged maturity. Do you divest or hang on in there?

Well dogs might actually have some advantages: They might actually create some profit, the market might not be exciting today – but it might be tomorrow. They might also have strategic importance – competitors can build their market presence by moving into undefended dog markets. Hence the term ‘guard dogs’.

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