It is tool used for the strategy formulation. It analysis Industry growth rate and market share of the company and indicates different business positions and strategies like cash, cow, dog, Question mark, star.
The BCG Matrix or growth-share matrix is a portfolio management framework that assists firms in determining how to prioritize their various products. The matrix is divided into four quadrants, each with its own distinctive symbol representing a different level of profitability: question marks, stars, pets (usually a dog), and cash cows. Executives could determine where to focus their resources and capital to generate the most value, as well as where to cut their losses, by assigning each business to one of these four categories.
The four quadrants each indicate a unique combination of relative market share and growth:
Low growth yet high market share - These “cash cows” will provide you cash that you can reinvest.
High Share, High Growth - Companies should put a lot of money into these “stars” since they have a lot of potential in the future.
Low market share despite high growth - Betting and depending on the prospects of becoming stars, companies should invest in or ignore these “question marks.”
Low market share and growth - These “dogs” should be liquidated, divested, or repositioned by companies.