BCG Matrix - 19
- shannu0719
- Jan 8, 2024
- 2 min read
Bruce Henderson created the BCG Growth Share Matrix as a tool for portfolio planning in the early 1970s.
The Boston Consulting Group (BCG) growth-share matrix is a planning tool that uses graphical representations of a company’s products/services to help the company decide what it should keep, sell, or invest more in. The model focuses on the market growth rate and the relative market share of the strategic business.
The BCG Growth-Share Matrix uses a 2x2 grid with growth on one axis and market share on the other. Each of the four quadrants represents a specific combination of relative market share and growth.
Low Growth, High Share: Companies should generate good returns from these products/services to reinvest elsewhere. – “Cash Cows”
High Growth, High Share: Companies should significantly invest in these products/services as they have high future potential. – “Stars”
High Growth, Low Share: Companies should invest in or discard these products/services, depending on SWOT and other analysis. – “Question Marks”
Low Share, Low Growth: Companies should liquidate, divert, or reposition these products/services. – “Dogs”

Companies first need to identify what position in the value chain will best enable them to achieve their goal of growth. For example, in renewable markets, few companies have access to viable project sites giving a large advantage over rivals, while in some cases having a good interconnection to the grid can be crucial to success.
Companies must make tough decisions about what operating model they should use, including whether to make or buy capabilities and skills, and whether to partner with other firms. A thorough understanding of scale effects will help companies make smarter decisions. In short, Companies need to comprehend these so-called control points, how they may change over time, and how they are affected by scale, before deciding where to play.
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