BCG Matrix with Example

What is BCG Matrix?

  • A strategic planning tool also called as growth/share matrix
  • BCG stands for Boston Consulting Group
  • BCG matrix was created by Bruce Henderson in the early 1970s

Use of BCG Matrix

  • To review a portfolio of products
  • Decision making – invest or divest
  • To ensure the possible allocation of resources

BCG Matrix categories

  • Stars
  • Dogs
  • Cash Cows
  • Question Marks

bcg matrix categories


BCG Stars

  • Stars are units having high relative market share + high market growth rate
  • They are market-leading products
  • A lot of investment is required to retain the leading position
  • Stars generate a lot of income but require investment too


Cash Cows

  • Cash cows are units having high relative market share + low market growth rate
  • Low competition market & saturated
  • Investment factor is under control or less required
  • Income is consistent and same is invested in other units



  • Dogs are units having low relative market share + low market growth rate
  • They are low profit-making or loss-making
  • Dogs use a lot of resources and time
  • Usually divesting decision is made


Question Marks

  • New product to market
  • Might require heavy investment
  • Decision making is difficult
  • Work on New Customer Acquisition

BCG Matrix with Example

bcg matrix example 2020

Limitations of BCG Matrix

  • Market share doesn’t define profitability
  • Getting data is difficult(Relative market share)
  • Market growth – Industry attractiveness
  • Neglects small competitors with fast-growing market shares

Must Explore

MBA Marketing Notes

MBA Finance Notes

MBA Operations Notes

MBA Human Resource Management Notes

Certification Courses for MBA Marketing

Certification Courses for MBA Finance

Share and Enjoy !

0 0 0

Related posts

Leave a Comment