Resource allocation: The BCG Matrix helps businesses allocate resources to their products based on their market share and growth rate. Portfolio evaluation: The BCG Matrix helps businesses evaluate their product portfolio and determine which products are generating revenue and which ones require investment. The BCG Matrix provides several benefits to businesses, including: What are the benefits of using the BCG Matrix? These products do not generate significant revenue for the company and should be phased out unless they complement other products. Companies should carefully evaluate these products and decide whether to allocate resources to them or phase them out.ĭogs are products with a low market share and low growth rate. These products require investment to increase their market share and become stars. Question marks are products with a low market share but high growth rate. Companies should use the revenue from these products to invest in stars and question marks. These products generate a lot of revenue for the company but do not require significant investment.

Companies should allocate resources to maintain or increase their market share.Ĭash cows are products with a high market share but low growth rate. These products have the potential to become cash cows if the company invests in them. Stars are products with a high market share and high growth rate. The matrix categorizes a company’s products into four categories or quadrants: Stars, Cash Cows, Question Marks, and Dogs, based on their market share and growth rate. The matrix has been updated to include additional factors such as industry attractiveness and competitive strength to provide a more comprehensive view of a company’s product portfolio. Over the years, the BCG Matrix has undergone some modifications and adaptations to reflect changes in the business environment. It has been used by companies such as General Electric, IBM, and Coca-Cola to evaluate their product portfolios. The BCG Matrix quickly became a popular strategy tool for businesses, and it is still widely used today. He developed the BCG Matrix as a way to categorize a company’s products based on their market share and growth rate. Henderson believed that businesses needed a tool to identify which products should receive investment and which ones should be phased out. The matrix was created to help businesses evaluate and prioritize their product lines. Henderson in 1968 while he was working at the Boston Consulting Group (BCG), a management consulting firm. The BCG Matrix was first outlined by Alan Zakon and then developed by Bruce D. The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic tool used by businesses to evaluate their product lines and determine where to allocate resources.

What is bcg matrix