BCG Matrix
Framework: BCG Growth-Share Matrix
Use for: Portfolio prioritization — categorizing business units, product lines, or initiatives by their market growth rate and relative market share to guide resource allocation decisions.
Time required: 30–60 minutes once you have the market data. Data gathering may take longer.
How to use this template
- Gather the data first. You need two numbers for each unit you're analyzing: (a) the market's annual growth rate and (b) your relative market share (your share divided by the largest competitor's share). Without real data, the matrix is just labeling opinions.
- Define the portfolio. List every business unit, product line, or initiative you're evaluating. The BCG matrix only produces insights through comparison within a portfolio.
- Set the thresholds. The growth-rate threshold divides "high" from "low" growth (often 10% is used, but set it based on what's high for your industry). The relative market share threshold divides "high" from "low" (1.0x means you match the market leader; above 1.0x means you are the leader).
- Classify and resource accordingly. Stars get investment. Cash Cows are milked to fund Stars. Question Marks get a decision: invest to build share, harvest, or exit. Dogs are candidates for divestiture unless there's a strategic reason to keep them.
- Revisit regularly. Products move through quadrants over time. A Star can become a Cash Cow as the market matures; a Question Mark that doesn't receive investment tends to become a Dog.
Portfolio being analyzed
Company / division: _______________
Date: _______________
High-growth threshold used: _____% per year
High relative-share threshold: _____ x competitor share
Step 1: List your portfolio units
| Unit / product | Annual market growth rate | Your market share | Largest competitor's share | Relative share (yours ÷ theirs) |
|---|---|---|---|---|
| [Example: Product A] | 12% | 18% | 22% | 0.82x |
Step 2: Classify each unit
| Unit | Quadrant | Rationale |
|---|---|---|
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog | ||
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog | ||
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog | ||
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog | ||
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog | ||
| ☐ Star ☐ Cash Cow ☐ Question Mark ☐ Dog |
Step 3: The matrix
HIGH MARKET GROWTH
|
| QUESTION MARKS STARS
| (invest or exit) (invest aggressively)
|
| ________________________________
|
| DOGS CASH COWS
| (harvest or divest) (protect and milk)
|
LOW MARKET GROWTH
___________________________________
LOW relative share HIGH relative share
Place your units on the matrix above by writing their names in the appropriate quadrant.
Step 4: Resource allocation decisions
| Unit | Current quadrant | Recommended action | Investment level |
|---|---|---|---|
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest | |||
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest | |||
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest | |||
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest | |||
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest | |||
| ☐ Invest ☐ Hold ☐ Harvest ☐ Divest |
Portfolio health check
- How many Stars do we have? _____ (pipeline for future Cash Cows)
- How many Cash Cows? _____ (should fund investment in Stars and Question Marks)
- How many Question Marks? _____ (needs a clear invest-or-exit decision)
- How many Dogs? _____ (candidates for divestiture or rationalization)
Overall portfolio balance assessment:
The BCG Growth-Share Matrix was developed by Bruce Henderson at the Boston Consulting Group in 1968. Covered in the Frameworks & Mental Models Guide on biztechprimer.com.