THE BOSTON CONSULTING GROUP
Boston Consulting Group (BCG) Growth/Share Matrix
Dr. Jeff Shay
THE BOSTON CONSULTING GROUP
Portfolio Planning:
Four Areas of Emphasis
Allocating resources
Formulating business-unit strategy
Setting performance targets
Analyzing portfolio balance
Cash flow
Continuity
Risk
THE BOSTON CONSULTING GROUP
BCG Growth-Share Matrix
Relative Market Share
Star
Question Mark
Dog
Cash Cow
High
Market
Growth
Low
Weak
Strong
THE BOSTON CONSULTING GROUP
Four Main Strategies of the BCG Model
Increase market share
Hold market share
Harvest
Divest
THE BOSTON CONSULTING GROUP
BCG Growth-Share Matrix:
Quadrant Characteristics
Relative Market Share
Star
Earnings: high stable, growing
Cash flow: neutral
Strategy: hold or invest for
growth
Question Mark
Earnings: low, unstable, growing
Cash flow: negative
Strategy: increase market share
or harvest/divest
Dog
Earnings: low, unstable
Cash flow: neutral or negative
Strategy: harvest/divest
Cash Cow
Earnings: high stable
Cash flow: high stable
Strategy: hold or add market
share
30%
Market
Growth
-10%
.1
10
THE BOSTON CONSULTING GROUP
Using the Model: Symbols
Product A
Previous
Market Size
and Position
Market
Share
Product A
Total
Market
Product B Market
Smaller but firm
has greater share
THE BOSTON CONSULTING GROUP
Plotting Your SBU’s
Relative Market Share
Star
Question Mark
Dog
Cash Cow
30%
Market
Growth
-10%
.1
10
THE BOSTON CONSULTING GROUP
Traditional SBU
or Product Path
Relative Market Share
Star
Question Mark
Dog
Cash Cow
30%
Market
Growth
-10%
.1
10
1
