BCG Growth Share Matrix

BCG Growth Share Matrix

A chart with four quadrants that helps businesses analyze themselves by placing themselves (or their subsidiaries or products) into one of the four quadrants. The chart plots market share (on the x-axis) against growth rate (on the y-axis). A company with a low growth rate and a large market share is called a cash cow; it requires little capital to maintain operations and produces a solid profit. A company with a low growth rate and a small market share is a dog; it generally produces a small profit and is usually sold. A company with a high growth rate and a small market share is called a problem child or question market; it is expensive to operate and produces little or no profit, but has the potential to do so. Finally, a company with a high growth rate and a large market share is called a star; these are expensive to operate, but produce large profits. Analysts use the BCG Growth Share Matrix in order to analyze how well or poorly a company or corporation is using its resources for itself, its subsidiaries, and/or its products. It was developed in 1970 by the Boston Consulting Group.