What is BCG Growth-Share Matrix?
The BCG Growth-Share Matrix (1968) plots a firm's business units on two dimensions: relative market share (the unit's share divided by the largest competitor's share) and market growth rate. Four cells result. Stars — high share, high growth — invest to maintain leadership. Cash Cows — high share, low growth — harvest cash to fund Stars and Question Marks. Question Marks — low share, high growth — selectively invest or divest based on potential to become Stars. Dogs — low share, low growth — divest or harvest. The matrix is criticized for using two single dimensions, but it remains a fast portfolio diagnostic.
How BCG Growth-Share Matrix actually works
The framework breaks down into the following moving parts. Knowing what each piece is — and what it is not — is what separates a B-grade answer from an A-grade answer in a written assignment.
- Star — invest aggressively to defend share in growing market
- Cash Cow — milk for cash; minimize investment
- Question Mark — invest to grow share OR divest; do not over-fund
- Dog — divest or harvest; rarely worth investing
- Use cash from Cows to fund Stars and select Question Marks
A worked example: P&G's portfolio
In a typical P&G portfolio analysis, Tide is a Cash Cow (dominant share, low-growth detergent market); Olay is a Star (strong share in higher-growth premium skincare); a new prestige beauty brand might be a Question Mark (low share, high growth); and divested brands like Folgers (sold to Smucker in 2008) were Dogs in P&G's portfolio context (low share for P&G, low growth). The 2014 brand divestiture program — selling 100+ brands to focus on 65 — was textbook BCG analysis applied at corporate scale.
Don't lose marks for these
- Treating market growth as the only attractive variable
- Defining "high" and "low" arbitrarily
- Confusing relative market share with absolute market share
How to use this on the exam
Score-maximizing moves
- Cite BCG 1968
- Apply to a multi-business firm
- Recommend specific resource allocation per cell
When to use BCG Growth-Share Matrix (and when not to)
Use BCG Growth-Share Matrix when your assignment asks you to analyze, structure, or recommend — and when you have at least two data points to populate every cell of the framework. Skip it when the question is asking for a numerical answer or a single recommendation, since BCG Growth-Share Matrix is a structuring tool, not a calculator.