BCG Matrix
Star, Cow, or Dog? How to Decide Where Your Business Should Invest Next
EXECUTIVE SUMMARY:
The Boston Consulting Group (BCG) Matrix is a portfolio management framework that helps organizations allocate resources and prioritize investments across their business units. It maps products on two dimensions: market growth rate and relative market share, categorizing them as Stars, Cash Cows, Question Marks, or Dogs. By clarifying which areas drive growth, generate cash, or consume resources, the BCG Matrix helps leaders balance short-term profitability with long-term strategic investment.
In our recent article on the 2x2 Matrix, we explored how two simple variables can reveal powerful insights. We briefly mentioned the BCG Matrix, one of the most famous examples of this framework. In today’s deep dive, we will look more closely at what it is, where it came from, and how to use it to make smarter strategic decisions.
The BCG Matrix was developed in 1970 by Bruce Henderson, the founder of the Boston Consulting Group, as a tool to help large corporations allocate resources across multiple business units. Its core idea is that a company’s growth and profitability depend on maintaining a balanced portfolio of businesses: some that generate cash, and others that require it.
What is the BCG Matrix?
