The Boston Growth Matrix, also known as the Boston Consulting Group (BCG) Matrix, is a strategic tool used to evaluate a company’s product portfolio based on market growth rate and relative market share. It helps businesses decide where to invest, develop, or divest.
The matrix categorises products or business units into four quadrants:
- Stars: High market share in high-growth markets. These are leaders that require investment to sustain growth.
- Cash Cows: High market share in low-growth markets. They generate steady profits and fund other areas.
- Question Marks: Low market share in high-growth markets. They have potential but need strategic decisions on investment or withdrawal.
- Dogs: Low market share in low-growth markets. Often candidates for divestment or repositioning.
The BCG Matrix supports long-term planning by identifying which products to nurture, maintain, or phase out, aligning resources with strategic priorities.