They consume a lot of cash but bring little in return.
Stars: The business units or products that have the best market share and generate the most cash are considered stars.Here is a breakdown of each BCG matrix quadrant: Where you choose to set the dividing line between each quadrant depends in part on how your company compares to the competition. Place each of your products in the appropriate box based on where they rank in market share and growth. The four quadrants are designated Stars (upper left), Question Marks (upper right), Cash Cows (lower left) and Dogs (lower right). In this four-quadrant BCG matrix template, market share is shown on the horizontal line (low left, high right) and growth rate is found along the vertical line (low bottom, high top). There are several that are free, available for subscription or are part of another charting program, such as the free one by Miro. Next, you can either draw a BCG matrix or find a BCG matrix template program online. If your market is extremely fragmented, however, you can use absolute market share instead. When examining market growth, you need to objectively determine your competitive advantage over your largest competitor and think in terms of growth over the next three years.
To analyze your own company, first, you'll need data on the relative market share and growth rate of your products or services. Reeves Martin, senior partner and managing director of the Boston Consulting Group, said that nearly 50 years after its inception, the BCG matrix model remains a valuable tool for helping companies understand their potential. The BCG model has been used since 1968 to help companies gain insights on what products best help them capitalize on market share growth opportunities and give them a competitive advantage. The current moneymakers are easy to identify now, but a good business strategy also asks, "What about the future?"Ĭreated by the Boston Consulting Group, the BCG matrix – also known as the Boston or growth share matrix – provides a strategy for analyzing products according to growth and relative market share. Business models are based on providing products or services that are profitable now, but they also attempt to identify changes in offerings that will keep the company profitable in the future.