The route of a product via the ideal development path will eventually bring in money with which investments can be made in other and/or new products that will be deployed in the market as a Question mark. This is a costly affair for a business as investments have been made in the product and in the promotion around the product. Some products remain stuck as a Question mark and become Dogs at an early stage.

The route to Dog should be postponed for as long as possible. The most ideal development path of a product is that from Question mark to Star and Cash Cow. If this product is no longer of strategic importance to the company, this product will be divested. When a product is in the underdog position, it has a small market share in a mature market. The revenue from the Cash Cow is invested in other products.

The product is a ‘milch cow’ and big money is made from this. The product will become more and more familiar. With targeted investments such as innovations and adjustments to the product, this lead in the market is maintained. The market share of the product grows like a ‘rising star’ in the growth market. It is still uncertain whether it can become a Star or a Cash Cow. Often it is concerns a product that is to be introduced and is unknown with a very small market share.

It is still a big question (problem child / wild cat) what the product is going to do on the market. Based on the BCG Matrix a product or business unit can be in one of the four following categories:įigure 1 – BCG Matrix: the four quadrants 1.

This is why the axes are often indicated with high and low. The absolute values of the axes are dependent on the line of business or industry. This assessment model is also known as the Boston Matrix, the Growth Share Matrix or Boston Consulting Group Matrix. It is used by organizations with high growth rates and a high market share in many high growth markets. The BCG Matrix is a portfolio management framework that helps companies decide how to prioritize their different businesses. The market growth potential for that product or its business unit.The relative market share that a certain product or its business unit has with respect to the competition.Do you want unlimited ad-free access and templates? Find out moreįor this purpose, the American Boston Consulting Group (BCG) developed the BCG Matrix in which products or (functional) business units are assessed on two features:

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