what is the bcg growth share matrix 
the boston consulting group bcg growth share matrix is a planning tool that uses graphical representations of a company s products and services to help the company decide what it should keep invest more money in or sell the company s offerings are plotted in a four square matrix the y axis represents the rate of market growth and the x axis represents market share the bcg growth share matrix was introduced by the boston consulting group in 1970 1understanding the bcg growth share matrixthe bcg growth share matrix breaks down products into four categories known as dogs cash cows stars and question marks each category quadrant has its own set of unique characteristics a company is considered a dog and should be sold liquidated or repositioned if its product has a low market share and is at a low growth rate dogs are found in the lower right quadrant of the grid dogs don t generate much cash for the company because they have a low market share and little to no growth they can turn out to be cash traps tying up company funds for long periods so they re prime candidates for divestiture 2products that are in low growth areas but for which the company has a relatively large market share are considered cash cows the company should milk the cash cow for as long as it can cash cows are seen in the lower left quadrant they re typically leading products in mature markets these products often generate returns that are higher than the market s growth rate they sustain themselves from a cash flow perspective these products should be taken advantage of for as long as possible the value of cash cows can be easily calculated because their cash flow patterns are highly predictable low growth high share cash cows should be milked for cash to reinvest in high growth high share stars with high future potential 2the matrix is not a predictive tool it takes into account neither new disruptive products entering the market nor rapid shifts in consumer demand products that are in high growth markets and that make up a sizable portion of that market are considered stars and should be invested in stars appear in the upper left quadrant stars generate high income but also consume large amounts of company cash a star eventually becomes a cash cow when the market s overall growth rate declines if it can remain a market leader 2questionable opportunities are those in high growth rate markets but in which the company doesn t maintain a large market share question marks or problem children appear in the upper right portion of the grid question marks typically grow fast but consume large amounts of company resources products in this quadrant should be analyzed frequently and closely to see if they re worth maintaining 2limitations of the matrixthe matrix is a decision making tool it doesn t necessarily take into account all the factors that a business must ultimately face increasing market share may be more expensive than the additional revenue gained from new sales product development can take years so businesses must plan carefully for contingencies the matrix only classifies businesses as low and high so it leaves midsize businesses out of the mix midsize companies often make up a big part of the market so leaving them out means that the business environment isn t truly reflected the bcg matrix assumes that all businesses operate independently of each other but that isn t always necessarily true certain players in the market such as dogs can end up giving others a boost sometimes unintentionally bruce henderson founded bcg and created the concept of the growth matrix in 1970 2example of a bcg growth share matrixwe can apply the growth matrix to many companies in the real world apple aapl is a great candidate let s take a look at the products apple has on the market according to the matrix categories the company earned 383 28 billion in net sales in 2023 out of which almost 298 1 billion was attributed to its products section the remaining 85 2 billion came from its services division 3