BCG Growth Share Matrix

The BCG growth share matrix is a chart that is created by Bruce Henderson of the Boston Consulting Group in 1968. The BCG growth share matrix displays the various business units on a graph of the market growth rate vs market share relative to competitors. It provides a useful way of looking at the opportunities open to you and helps you to analyze which segments of your business are in a good position and which are not. So that you can decide on the most appropriate investment strategy for your business in the future. This model also provides guidance for resource allocation. It has four categories.

1: Stars:
It means high growth and high market share. For example, Apple Computer has a large share in the rapidly growing market for portable digital music players.

2: Cash cows:
It means low growth and high market share. A dairy cow is an example of a cash cow. As after the initial capital outlay has been paid off, the animal continues to produce milk for many years.

3: Dogs:
It means low growth and low market share. For example, Amarat cola.

4: Question mark:
It means high growth and low market share. Consider Hewlett-Packard’s small share of the digital camera market, behind industry leader Canon’s 21% (Canon 2006). However, this is a rapidly growing market.

Reference:

http://www.coursework4you.co.uk/essays-and-dissertations/bcg-growth-sharemarket.php
and http://en.wikipedia.org/wiki/Growth-share_matrix