BCG matrix
What it is for
Use it when everything you sell gets the same investment. Products do not share a role: some make cash, some burn it to grow, some do neither. Seeing them on two axes makes it hard to keep funding the ones going nowhere.
Your products
Relative share is yours divided by the largest competitor: 2 means twice as much, 0.5 half. The line sits at 1.
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The big bubbles at the bottom right pay for everything else. If there are none, the stars and question marks are being funded by something else, and it is worth knowing what.
Frequently asked questions
How to use this model
What is relative market share?
It is your share divided by the largest competitor, not your slice of the pie. If you have 20% and the leader has 40%, your relative share is 0.5. If you lead with 40% and the runner-up has 20%, yours is 2. The line between quadrants sits at 1, where you are as big as your largest competitor.
Why is high share on the left?
It is the convention the matrix was born with at the Boston Consulting Group in the seventies, and it stuck because everyone reads the quadrants in those positions. Drawing it the other way is not wrong in itself, but readers look for cash cows at the bottom right and find them at the bottom left.
Should a dog always be dropped?
No. A low-share product in a flat market can stay if it is cheap to keep, if it serves a customer who buys other things, or if it fills capacity that would otherwise sit idle. The question is not whether to close it, it is whether it still deserves time and money to grow.
Where do I get market growth figures?
In practice usually from an estimate, not a precise source: how the sector moved over two years, what suppliers say, how much the demand you see is growing. The matrix compares your products with each other, so it matters more that the estimate is made the same way for all of them than that it is exact.
Why does the share axis run right to left?
It is the original Boston Consulting Group convention: share grows towards the left, so the strong quadrants sit on the left and the weak ones on the right. Many reproductions flip it and make the drawings impossible to compare.
What do the four names suggest doing?
Stars get funded because they grow, cash cows produce the money that funds them, question marks need a decision by a date and dogs get wound down. It stays a scheme for discussing, not a rule to apply literally.