The BCG matrix (also known as Boston Box) is a framework to assist in decision-making on existing product lines.
Developed in the 1970s, it was used to evaluate how a company should think about its portfolio on the basis of two criteria: a product's relative market share and the market growth rate that resulted in four archetypes: The Dogs, Question Marks, Stars and Cash Cows.
- Components of a BCG Matrix
- What is a BCG Matrix used for
- When to use BCG Matrix
- Using the Tool
- Example of BCG Matrix
- BCG Matrix tips
- Advantages and Disadvantages of BCG Matrix
The BCG Matrix (also known as the Boston Consulting Group analysis, the Growth-Share matrix, the Boston Box or Product Portfolio matrix) is a tool used in corporate strategy to analyze business units or product lines on the basis of two variables: relative market share and rate of market growth.
A corporation can plot its business units accordingly and determine where to allocate extra (financial resources, where to cash out and where to divest by combining these two variables into a matrix.
Therefore, the main purpose of the BCG Matrix is to make corporate-level investment decisions. Four different category labels can be attributed to each unit depending on how well the unit and the sector is doing: Dogs, Question Marks, Cash Cows and Stars.