BCG Matrix

Question 1

what is the BCG matrix used for?

Answer 1

to help companies decide where to allocate their resources

Question 2

how does the BCG matrix work?

Answer 2

companies measure themselves along two axes:

• market growth
• market share

Question 3

high market growth, high market share?

Answer 3

star

Question 4

low market growth, high market share?

Answer 4

cash cow

Question 5

high market growth, low market share?

Answer 5

problem child

Question 6

low market growth, low market share?

Answer 6

dog

Question 7

star?

Answer 7

dominant position in an attractive market

threat of new entrants requires them to innovate

Question 8

cash cow?

Answer 8

dominant position in a low growth market

competitors will not attack market share as market is low growth

Question 9

problem child?

Answer 9

low market share in an attractive market

struggling to get a foothold in the market

Question 10

dog?

Answer 10

low market share in an unattractive market

product may lack economies of scale

Question 11

when may BCG matrix be used?

Answer 11

when analysing a company’s position in their market and assessing whether further investment should be made