BCG Growth-Share Matrix

Overview

Maps each business unit on a 2×2 grid of market growth rate vs. relative market share, revealing which units generate cash, which absorb it, and which to invest in, harvest, or exit. Four quadrants: Stars (invest), Cash Cows (harvest), Question Marks (binary decide), Dogs (exit or hold minimally). Rests on two empirical anchors: experience curve (high share = lowest cost) and industry life cycle (high growth demands reinvestment; maturity throws off cash).

Composes with: porters-five-forces to define industry boundary first · swot-analysis for internal-capability depth · ansoff-matrix to set growth direction for units worth investing in.

When to Use

• Firm operates ≥ 3 distinct business units competing for a shared capital pool
• Annual strategy or budget reviews need a forcing function for prioritization
• PE/VC portfolio requires a quick health-read across holdings; M&A teams assessing retain vs. divest
• AI capital reallocation: deciding which units to harvest to fund AI capex / AI-native bets, and whether an AI unit is a true Star or an expensive Question Mark amid AI-native competition

When NOT to use: single-product startup · highly interdependent units where divesting a Dog may destroy a Cash Cow · market in technology transition with unreliable growth data · firm-level competitive analysis within one market

Coaching Novices (Adaptive Front Door)