The BCG Matrix 
The BCG Matrix has a few different names. It is also called the Growth-Share Matrix, Portfolio Analysis, and The Boston Matrix. Management consultants at the Boston Consulting Group developed their matrix in the early 1970s. They designed it to help managers at large corporations decide which business units they should invest in Mindtools.com, 2014). So, which areas of the business deserve more resources and investment? The BCG Matrix consists of four categories based on the growth rate of the industry and their competitive position.
The categories look like this: (Jurevicius, 2013)
The relative market share is a dimension used to evaluate these four categories. The higher the market share, the higher the returns. This is because a firm that produces more benefits from higher economies of scale and experience curve, which results in higher profits (Jurevicius, 2013). This isn’t a one-way street though; some firms can have the same benefits even with lower production and lower market shares.
The relative market share is the other dimension used to evaluate these four categories. High market growth rate means higher earnings and sometimes profits but it also consumes a lot of cash, which is used as investment to stimulate future growth (Jurevicius, 2013). What this means is that rapidly growing industries use large amounts of cash and are only worth investing in if they are expected to grow or at least maintain market share in the future.
The four categories are Stars, Question Marks, Cash Cows, and Dogs. Stars have high growth industries and maintain high market share. They generate cash and spend cash. Question Marks have a low markets share in fast growing markets. They consume large amount of cash and incurs losses. Cash Cows are the most profitable. They have a large market share in a slow growing industry. Dogs have a low market share in a slow growing industry. Dogs are considered cash traps because money is tied up in the business and it has no
The categories look like this: (Jurevicius, 2013)
The relative market share is a dimension used to evaluate these four categories. The higher the market share, the higher the returns. This is because a firm that produces more benefits from higher economies of scale and experience curve, which results in higher profits (Jurevicius, 2013). This isn’t a one-way street though; some firms can have the same benefits even with lower production and lower market shares.
The relative market share is the other dimension used to evaluate these four categories. High market growth rate means higher earnings and sometimes profits but it also consumes a lot of cash, which is used as investment to stimulate future growth (Jurevicius, 2013). What this means is that rapidly growing industries use large amounts of cash and are only worth investing in if they are expected to grow or at least maintain market share in the future.
The four categories are Stars, Question Marks, Cash Cows, and Dogs. Stars have high growth industries and maintain high market share. They generate cash and spend cash. Question Marks have a low markets share in fast growing markets. They consume large amount of cash and incurs losses. Cash Cows are the most profitable. They have a large market share in a slow growing industry. Dogs have a low market share in a slow growing industry. Dogs are considered cash traps because money is tied up in the business and it has no