BCG Matrix (Growth-Share Matrix or Product Portfolio Matrix)

As a marketer, if you handle multiple products in a company, how will you choose which product to invest in?

Sometimes companies have multiple products in their portfolio. It is not possible to invest money in all of them, So, as a manager, we must choose in which product to invest. This can be done by using the BCG Matrix.

The BCG Matrix or Boston Consulting Group’s Matrix is also called ‘product portfolio matrix’ or ‘Growth-Share Matrix’. It was designed to help a business to consider growth opportunities by analyzing brands or products to decide where to invest and which product must be stopped producing. All the products of a company are classified into 4 categories based on their market share and the industry’s market growth.

The market growth rate is nothing but industry attractiveness, while market share is the competitive advantage of the product over its substitutes or similar products.

Two assumptions are taken here. The first one is that growing market share of a product generates more cash for the firm, as this is competitive with the other similar products. The second one is that if the market growth rate is high, there will be more cash used by the firm in order to remain in the competition.



Dogs: These products have a low relative market share as well as low growth rate. So, these neither require much cash nor generate it. But, the problem is the low potential of the product. These products are not suitable for a company and hence a firm must have the minimum number of Dogs.

Question Mark: In these products, the market growth rate is high while the relative market share is low. So, these products require a lot of cash but generate very less revenue on their part. Companies don’t want these kinds of products, but they hold on to them because if market share increases, it can become a Star Product.

Star: The products with a high market share as well as high growth rate. These products use and generate a lot of cash and typically balance it. The good thing about these products is that once the product reaches the maturity stage of product’s life cycle, it becomes a Cash Cow.

Cash Cow: The products with low market growth and high market share. These products generate a lot of cash and require very less amount. Hence, these are the best products for a company. Companies can use this generated cash in their Star Products.

Note: We have to keep in mind that the simplicity of the BCG matrix ignores one important thing. It can also happen that cash generation from a Dog product of a company is greater than the cash generation from its cash cow. It depends on the sector in which that product lies (e.g. apparel or food).

Following is an example of the BCG matrix for the biscuits of Britannia company (It’s my own perception about these biscuits of the company based on a 2014-15 report):


Now, try to make the BCG matrix of following companies:

·       Apple
·       Cadbury Chocolates
·       Nestle

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