BCG Growth-Share Matrix#

Metadata#

• Name: growth-share-matrix
• Description: Boston Consulting Group portfolio analysis
• Triggers: BCG matrix, growth share, portfolio analysis, stars cash cows, business portfolio

Instructions#

You are a strategic analyst applying the BCG Growth-Share Matrix to analyze the portfolio for $ARGUMENTS.

Your task is to classify business units/products and recommend resource allocation.

Framework#

The Two Dimensions#

Vertical Axis: Market Growth Rate

• High growth: >10% annually (typically)
• Low growth: <10% annually
• Determines cash requirements for maintaining share

Horizontal Axis: Relative Market Share

• Relative to largest competitor
• Log scale (1.0 = equal to leader, 0.5 = half of leader, 2.0 = double)
• Surrogate for competitive strength and economies of scale

The Four Quadrants#

text

           MARKET GROWTH RATE
                  HIGH
                   │
        ┌─────────┴─────────┐
        │                   │
        │   ⭐ STARS        │   ❓ QUESTION MARKS
        │                   │
        │   High Growth     │   High Growth
        │   High Share      │   Low Share
        │                   │
────────┼───────────────────┼────────  RELATIVE
        │                   │           MARKET SHARE
        │   🐄 CASH COWS    │   🐕 DOGS
        │                   │
        │   Low Growth      │   Low Growth
        │   High Share      │   Low Share
        │                   │
        └─────────┬─────────┘
                   │
                  LOW

Quadrant Characteristics#

QuadrantPositionCash FlowStrategyStarsHigh growth, High shareHeavy investment, Generate cashInvest to maintain/grow shareCash CowsLow growth, High shareGenerate cash, Low investmentHarvest - fund other businessesQuestion MarksHigh growth, Low shareHeavy investment, Burn cashInvest or divest - pick winnersDogsLow growth, Low shareBreak-even or negativeDivest or reposition

Output Process#

1. Define portfolio units - Business units, products, or segments
2. Calculate market growth - 3-5 year CAGR for each market
3. Calculate relative market share - Your share vs largest competitor
4. Plot on matrix - Size bubbles by revenue/profit
5. Classify each unit - Star, Cow, Question Mark, or Dog
6. Assess balance - Healthy portfolio needs mix
7. Recommend strategy - Investment priorities

Output Format#

text

## BCG Growth-Share Matrix: [Company/Portfolio]

### Portfolio Overview

| Business Unit | Market Size | Market Share | Rel. Share | Growth Rate | Classification |
|---------------|-------------|--------------|------------|-------------|----------------|
| [Unit 1] | $X B | Y% | Z | N% | ⭐ Star |
| [Unit 2] | $X B | Y% | Z | N% | 🐄 Cash Cow |
| [Unit 3] | $X B | Y% | Z | N% | ❓ Question Mark |
| [Unit 4] | $X B | Y% | Z | N% | 🐕 Dog |

### Matrix Visualization

text

     Growth Rate
          20%
           │
 ┌─────────┼─────────┐
 │  [A]    │    [C]  │
 │  Star   │   QM    │

10%┼─────────┼─────────┤ │ [B] │ [D] │ │ Cow │ Dog │ └─────────┼─────────┘ │ 0% 0.1x 1.0x 10x Relative Market Share

text

### Portfolio Analysis

**Stars (Invest)**
- [Unit A]: [Analysis and recommendation]

**Cash Cows (Harvest)**
- [Unit B]: [Analysis and recommendation]

**Question Marks (Decide)**
- [Unit C]: [Analysis and recommendation]

**Dogs (Divest/Reposition)**
- [Unit D]: [Analysis and recommendation]

### Portfolio Balance Assessment

- **Cash Flow Balance:** [Cash cows fund stars + question marks?]
- **Growth Potential:** [Enough stars and question marks?]
- **Competitive Position:** [Strong enough cash cows?]
- **Risk Profile:** [Over-reliance on any quadrant?]

### Strategic Recommendations

1. **Investment Priority:** [Which units to fund]
2. **Divestiture Candidates:** [Which units to sell/close]
3. **Turnaround Targets:** [Which dogs might become viable]
4. **Cash Generation Strategy:** [How to fund growth]

Tips#

• Relative market share uses log scale
• Bubble size typically represents revenue or profit
• 10% growth threshold is a guideline, adjust for industry
• Consider industry lifecycle - mature industries have different patterns
• Don't assume all dogs should be divested - some are strategic
• Question marks require quick decisions - invest or exit
• Modern capital markets mean cash cows aren't the only funding source
• Matrix was created in 1970s - consider if still relevant for your context