Analyze business situations with a BCG Matrix
Want to plan for the future but can’t decide where to start? Learn how a BCG Growth-Share Matrix can help your team unlock important insights about your business.
When opportunity knocks, does your team have trouble figuring out how to respond? If so, consider analyzing business solutions by using Post-it® Super Sticky Notes and Post-it® Super Sticky Easel Pads to build a BCG Growth-Share Matrix.
BCG stands for Boston Consulting Group, a global consulting firm. In 1970, the firm’s founder, Bruce D. Henderson, developed the framework to help companies decide where to invest their money and energy. This system of strategic prioritization, also known as a BCG Model, is still a central concept in business education today.
You don’t have to be a Fortune 500 company to benefit from a BCG Matrix. Even small teams can use them to guide decisions about which products to invest in, or which new markets to enter. It’s a simple yet powerful tool to ensure you’re focusing your time and money to achieve maximum results.
How to use it
- Draw a large square on an easel. The vertical axis shows the rate of market growth, while the horizontal axis indicates the relative market share, as shown in the diagram.
- Divide the square into four equal quadrants. Write down the name of each of your products on a separate Post-it® Super Sticky Note. In deciding which quadrant a product fits into, consider the rate of market growth and market share.
- Each product will fall into one of four zones, which will determine its potential and suggest a specific action to take. These zones are “Stars,” “Cash Cows,” “Dogs” and “Question marks.”
- Stars are products with the best market share, generate the most cash and are in a fast-growing category. Stars are the products to invest in.
- Cash Cows are leaders in the marketplace, generate more cash than they consume and are part of a slow-growing category. Companies should invest in Cash Cows to maintain their current level of productivity.
- Dogs are products with both a small market share and a low growth rate. These products are prime candidates for discontinuation.
- Question Marks are products with high growth prospects but a low market share. They should be analyzed carefully to determine whether they’re worth the investment required to grow market share.
Teams need solutions that illuminate a clear path forward. With a BCG Matrix, your team will have the information they need to make informed, strategic decisions.