Definition: the BCG Matrix is an early (1970) strategic portfolio management tool created by the Boston Consulting Group.
The idea behind it is that to ensure long-term value creation, a company should have a portfolio of products that contains both high-growth products in need of cash inputs and low-growth products that generate a lot of cash.
Placing the products of a strategic business unit in 2 dimensions (market growth and market share) creates 4 quadrants and corresponding investment strategies:
- Cash Cows (low market growth, high market share)
- Stars (high, high)
- Question Marks (high, low)
- Dogs (low, low)
Also called Business Portfolio Matrix or Growth-Share Matrix.