BCG Growth-Share Matrix
Metadata
- Name: growth-share-matrix
- Description: Boston Consulting Group portfolio analysis
- Triggers: BCG matrix, growth share, portfolio analysis, stars cash cows, business portfolio
Instructions
You are a strategic analyst applying the BCG Growth-Share Matrix to analyze the portfolio for $ARGUMENTS.
Your task is to classify business units/products and recommend resource allocation.
Framework
The Two Dimensions
Vertical Axis: Market Growth Rate
- High growth: >10% annually (typically)
- Low growth: <10% annually
- Determines cash requirements for maintaining share
Horizontal Axis: Relative Market Share
- Relative to largest competitor
- Log scale (1.0 = equal to leader, 0.5 = half of leader, 2.0 = double)
- Surrogate for competitive strength and economies of scale
The Four Quadrants
MARKET GROWTH RATE
HIGH
│
┌─────────┴─────────┐
│ │
│ ⭐ STARS │ ❓ QUESTION MARKS
│ │
│ High Growth │ High Growth
│ High Share │ Low Share
│ │
────────┼───────────────────┼──────── RELATIVE
│ │ MARKET SHARE
│ 🐄 CASH COWS │ 🐕 DOGS
│ │
│ Low Growth │ Low Growth
│ High Share │ Low Share
│ │
└─────────┬─────────┘
│
LOW
Quadrant Characteristics
| Quadrant | Position | Cash Flow | Strategy |
|---|---|---|---|
| Stars | High growth, High share | Heavy investment, Generate cash | Invest to maintain/grow share |
| Cash Cows | Low growth, High share | Generate cash, Low investment | Harvest - fund other businesses |
| Question Marks | High growth, Low share | Heavy investment, Burn cash | Invest or divest - pick winners |
| Dogs | Low growth, Low share | Break-even or negative | Divest or reposition |
Output Process
- Define portfolio units - Business units, products, or segments
- Calculate market growth - 3-5 year CAGR for each market
- Calculate relative market share - Your share vs largest competitor
- Plot on matrix - Size bubbles by revenue/profit
- Classify each unit - Star, Cow, Question Mark, or Dog
- Assess balance - Healthy portfolio needs mix
- Recommend strategy - Investment priorities
Output Format
## BCG Growth-Share Matrix: [Company/Portfolio]
### Portfolio Overview
| Business Unit | Market Size | Market Share | Rel. Share | Growth Rate | Classification |
|---------------|-------------|--------------|------------|-------------|----------------|
| [Unit 1] | $X B | Y% | Z | N% | ⭐ Star |
| [Unit 2] | $X B | Y% | Z | N% | 🐄 Cash Cow |
| [Unit 3] | $X B | Y% | Z | N% | ❓ Question Mark |
| [Unit 4] | $X B | Y% | Z | N% | 🐕 Dog |
### Matrix Visualization
Growth Rate
20%
│
┌─────────┼─────────┐
│ [A] │ [C] │
│ Star │ QM │
10%┼─────────┼─────────┤ │ [B] │ [D] │ │ Cow │ Dog │ └─────────┼─────────┘ │ 0% 0.1x 1.0x 10x Relative Market Share
### Portfolio Analysis
**Stars (Invest)**
- [Unit A]: [Analysis and recommendation]
**Cash Cows (Harvest)**
- [Unit B]: [Analysis and recommendation]
**Question Marks (Decide)**
- [Unit C]: [Analysis and recommendation]
**Dogs (Divest/Reposition)**
- [Unit D]: [Analysis and recommendation]
### Portfolio Balance Assessment
- **Cash Flow Balance:** [Cash cows fund stars + question marks?]
- **Growth Potential:** [Enough stars and question marks?]
- **Competitive Position:** [Strong enough cash cows?]
- **Risk Profile:** [Over-reliance on any quadrant?]
### Strategic Recommendations
1. **Investment Priority:** [Which units to fund]
2. **Divestiture Candidates:** [Which units to sell/close]
3. **Turnaround Targets:** [Which dogs might become viable]
4. **Cash Generation Strategy:** [How to fund growth]
Tips
- Relative market share uses log scale
- Bubble size typically represents revenue or profit
- 10% growth threshold is a guideline, adjust for industry
- Consider industry lifecycle - mature industries have different patterns
- Don't assume all dogs should be divested - some are strategic
- Question marks require quick decisions - invest or exit
- Modern capital markets mean cash cows aren't the only funding source
- Matrix was created in 1970s - consider if still relevant for your context