The BCG matrix, developed in the early 1970s by Bruce Henderson, is a strategic tool for businesses to analyze their product portfolios by categorizing them into four quadrants: Stars, Question Marks, Cash Cows, and Dogs, based on market growth and market share. Each quadrant represents different resource allocation needs and growth potential, with Stars requiring investment for growth, Cash Cows generating cash with minimal investment, Question Marks needing significant resources to increase market share, and Dogs generally being inefficient or losing value. However, the model has limitations, as it oversimplifies business valuations and does not consider other factors influencing profitability.

1. Name: Sonam Mishra
SEM: MBA 1
Section: C
Subject: Marketing Management

2. What is the BCG Matrix?
BCG Matrix is stand for (Boston Consulting group’s) product portfolio matrix is
designed to help business to consider growth opportunities with long-term strategic
planning.
The companies that are large enough to organized into strategic business units face the
challenge of allocating resources among those units. In the early 1970’s the BCG
developed a model for managing a portfolio of different business units (or major
product lines). The BCG growth- share matrix displays the various business units
on graph of the market growth rate vs. market share relative to competitors.

3. The Model Given By…
This BCG Matrix product portfolio planning model
developed by Bruce Henderson in early 1970’s.

4. Matrix is divided into 4 quadrants

5. Matrix is divided into 4 quadrants
1. Stars- Stars represent business units having large market share in a fast growing industry. They
may generate cash but because of fast growing market, stars require huge investments to maintain
their lead.
These are well established products or brands with fantastic opportunities to generate large
amounts of ROI.
•High growth market
•High market share
•Cash neutral
•Hold

6. Example for Stars
The bottled water Kinley, a Coca-Cola product, is one such example of Stars.
This example is suitable here because the mineral water industry is still
viewed as a gradually growing segment on an international scale. The rising
population would require more bottled water to fulfill the needs of the
people. Due to the rising need for bottled water, the growth opportunities for
this business product in the industry has increased. Even though Kinley
faces competition from other competitors.

7. Matrix is divided into 4 quadrants
2. Question Marks- Question marks represent business units having low relative market
share and located in a high growth industry. They require huge amount of cash to
maintain or gain market share. Most businesses start as question marks as the
company tries to enter a high growth market in which there is already a market-share. If
ignored, then question marks may become dogs, while if huge investment is made, then
they have potential of becoming stars.
Unsure in which direction these products will go. Known as the problem child(s), they can be turned into
stars or end up as dogs.
•High market growth
•Low market share
•Cash absorbing
•Build

8. Example for Question
Fanta, a Coca-Cola product, is one such example where the business units can be seen as a
question mark. As the brand has not been able to gain widespread popularity similar to
Coke. Therefore, the brand is losing its popularity. However, in some areas, it has been able
to obtain a generous sales volume.

9. Matrix is divided into 4 quadrants
3. Cash Cows- Cash Cows represents business units having a large market share in a
mature, slow growing industry. Cash cows require little investment and generate cash that
other business units. These SBU’s are the corporation’s key source of cash, and are
are the base of an organization. These businesses usually follow stability strategies.
These are well-established and consistently produce cash, however the growth opportunities are limited.
•Low market growth
•High market share
•Cash generating
•Milk

10. Example for Cash Cows
Coca-Cola is one such example of Cash Cows. This product is sold across 200 countries in a
mature beverage industry. The bottling partners in different regions help in making the
finished beverages available to the market. This is how the organization is earning a significant
amount of revenues from its finished products. In a mature industry, it is advisable for a
company to keep the sales volume high as the business unit is comparatively a good source to
generate revenue.

11. Matrix is divided into 4 quadrants
4. Dogs- Dogs represent businesses having weak market shares in low-growth markets.
They neither generate cash nor require huge amount of cash. These business firms have
of high costs, poor quality, ineffective marketing, etc. Unless a dog has some other
liquidated if there is fewer prospects for it to gain market share. Number of dogs should
organization.
Products which have little or no value. They are a drain on resources and cash. It is often difficult to make a
profit from dogs.
•Low market growth
•Low market share
•Cash neutral
•Diversify

12. Example for Dogs
Diet coke, a Coca-Cola product, is on such example of Dogs. It was launched with the motive to
offer consumers relatively healthier beverage option in terms of calories consumed. However, the
brand has not been able to fetch consumers’ interest, which led to declined sales of this business
unit. The soda industry has been matured in recent years; therefore, the growth prospects for new
products are limited now.

14. Limitations of BCG Matrix
1. BCG matrix classifies businesses as low and high, but generally businesses can be
medium also. Thus, the true nature of business may not be reflected.
2. Market is not clearly defined in this model.
3. High market share does not always leads to high profits. There are high costs also
involved with high market share.
4. Growth rate and relative market share are not the only indicators of profitability.
This model ignores and overlooks other indicators of profitability.
5. At times, dogs may help other businesses in gaining competitive advantage. They
can earn even more than cash cows sometimes.
6. This four-celled approach is considered as to be too simplistic.