BCG Matrix
The BCG Matrix sorts your business units into four boxes by market growth and market share, so you can see in one glance where to invest, where to milk, and where to walk away.
Plot every unit on two axes and each falls into one of four boxes, from Star to Dog.
Reach for this when…
- You run several products or units and cash is finite - you need to decide what gets funded.
- A unit feels like a drain but nobody wants to say so out loud.
- You are building the case for backing one bet over another and need a shared picture.
How to run it
- List every business unit or product line.
- For each, mark its market growth (is the market itself expanding?) and your share relative to the largest rival.
- Plot each one into a quadrant: Star, Cash Cow, Question Mark or Dog.
- Fund the Stars, milk the Cash Cows to pay for them, and decide which Question Marks to back or drop.
- Be honest about the Dogs. Fix, sell, or close - do not let them quietly absorb attention.
A worked example
Situation. Mariana Costa ran Sabor, a small food producer in Sao Paulo, Brazil, and was splitting her marketing budget evenly across all five ranges.
Applied. Plotted on the matrix, her preserves were the one Star, two spice ranges were Cash Cows, and they were quietly funding two fading sauce lines sitting as Dogs.
Result. She cut the sauces, kept milking the spices, and put that budget behind the preserves. Within a year the preserves were her biggest line.
The catch
The matrix reduces a business to two axes, and market share is a poor proxy for profit - a small slice of a rich niche can beat a big slice of a commodity. It also says nothing about how units feed each other. Use it to open the resource-allocation argument, not to close it.
A 'Dog' that shares customers with a Star is not really a Dog. Look at the links before you cut.
Origin: Bruce Henderson, Boston Consulting Group (1968-70).