Products with the lion’s share of a fast-growing market are known as “stars”. Companies should therefore milk their cash cows and divert funds to more experimental projects, i.e. Typically located in the lower-left quadrant, cash cows are a company’s flagship products in mature markets.Īs such, little investment is required to fight off competition making these some of the most profitable assets. Products with relatively low-growth rates but with large market shares are known as “cash cows”. Question marks (high growth, low share).The quadrants of the BCG Matrix are split into the following four categories: The y-axis represents the market growth rate and the x-axis relative market share.īy placing their business offerings into one of these four categories, companies determine where resources should be allocated to generate the most value or which to cut loose and minimize losses.
The BCG matrix does so by plotting a business’s products or SBUs on a four-square matrix. The Boston Consulting Group’s growth share matrix (commonly referred to as the BCG matrix) is a business tool that reviews a company’s product portfolio or SBUs (strategic business units) to help them decide in what to invest, what to discontinue, and which products to develop further.
