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BCG growth-share matrix
Sorts a portfolio by market growth and relative share, to decide where cash goes. Old, blunt, still clarifying — and the labels have done real damage to businesses that deserved better.
What it is
The Boston Consulting Group's portfolio matrix, plotting business units on market growth rate against relative market share. Its underlying logic is about cash: which units generate it, which consume it, and whether the flow between them is deliberate.
- Stars
- High growth, high relative share. Leaders in growing markets. Usually cash-neutral — they generate a lot and consume a lot holding position.
- Cash cows
- Low growth, high relative share. Mature leaders throwing off cash with modest reinvestment. These fund everything else, and are frequently starved to fund something more exciting.
- Question marks
- High growth, low relative share. Cash-hungry and unproven. Each needs a decision: invest hard enough to contend, or exit. Funding them at a level that cannot win is the worst option and the most common.
- Dogs
- Low growth, low relative share. Conventionally divest — but the label is crude and has ended businesses that were quietly profitable in defensible niches.
- Relative share
- Share compared with the largest competitor, not with the total market. This is what makes the horizontal axis mean anything.
- Cash flow logic
- The point of the matrix: cows fund question marks, question marks become stars, stars mature into cows. A portfolio where that sequence is not happening is a collection, not a portfolio.
The mistake people makeEvery unit leader will define their market narrowly enough to appear as a leader. Fix the market definitions centrally before anyone sees the axes, or the exercise becomes a negotiation about geography.
What it’s forYou have a portfolio of products or units and need to decide where money goes.
What it’s not forYou have one product. And treat the labels with care — "dog" has ended more good businesses than it has saved.
How you run it
- Define the market for each unit carefullyRelative share depends entirely on how the market is drawn, and every unit head will draw it narrowly enough to look like a leader.
- Use relative share, not absoluteShare against the largest competitor, not against the whole market. Being at 15 per cent means something different against a leader at 18 than against one at 60.
- Size the bubbles by revenuePosition without scale misleads. A dog worth £6m and a dog worth £200k warrant different conversations.
- Trace the cash, not just the positionThe model's actual logic is about funding: cash cows fund question marks, some of which become stars. If the cash is not flowing that way, the portfolio is not being managed.
- Distrust the labels"Dog" has closed profitable, cash-generative niche businesses whose only failing was a low share of a slow market. Judge each on cash and strategic role, not on which quadrant it landed in.
The prompt
Two ways to run it
Run this tool in your own Claude
The short prompt starts your partner against the library on your disk. The long one carries everything with it and needs nothing installed.
Your playbook
It lands in the earliest stage this tool suits. Move it on the Playbook page.
You’ll need
- Revenue and share by product or unit
- Market growth rates from a defensible source
- Cash generated and consumed by each
You’ll end up with
- Every unit positioned, sized by revenue
- A cash flow read across the portfolio
- Investment, hold, harvest or exit for each