The BCG matrix in marketing: the four quadrants, how to plot one, and what to do with each cell

The BCG matrix plots everything you sell on two axes and tells you where the money should go. The horizontal axis is relative market share, meaning your share divided by the share of the largest competitor in that market. The vertical axis is the growth rate of that market. The four boxes that result are stars, cash cows, question marks and dogs, and each one carries a different instruction: invest, harvest, decide, or exit. It was created by Boston Consulting Group in 1970, out of founder Bruce Henderson's essay on the product portfolio, and the BCG approach in marketing means using it to allocate budget across a portfolio rather than arguing product by product.

The reason it has lasted is that it forces one uncomfortable question into the open: which of our products are we funding out of habit?

The four quadrants

Quadrant	Position	Cash behaviour	What to do
Star	High share, high growth	Generates and consumes cash	Fund it properly and defend the share while the market is still growing
Cash cow	High share, low growth	Generates more than it needs	Hold it efficiently and use the cash to fund stars and question marks
Question mark	Low share, high growth	Consumes cash	Pick a few, back them hard enough to take share, and stop the rest
Dog	Low share, low growth	Roughly neutral, and absorbs attention	Keep only where it serves a strategic purpose, otherwise simplify or exit

The logic running through all four is that cash flows from the mature parts of the portfolio into the growing parts. A portfolio of cash cows funds nothing for the future. A portfolio of question marks has no engine to pay for them.

How to plot one, in five steps

• Define the units. Product lines, brands or business units. Pick a level where each one has its own market and its own numbers.
• Define the market for each one. This is the step that decides whether the matrix is useful. Define it as the set of alternatives your buyer actually considers, and write the definition down next to the chart so everybody is arguing about the same thing.
• Get market growth. The annual growth rate of that market. Industry association data, trade body figures and your own distributor's numbers are the usual sources. Record the source and the year beside the figure.
• Calculate relative market share. Your share divided by the largest competitor's share. At 1.0 you are level with the leader. Above 1.0 you are the leader. The midline on the axis is conventionally drawn at 1.0.
• Draw it with bubbles sized by revenue. Position tells you the strategy, bubble size tells you how much is at stake, and the two together are what make the chart worth presenting.

An illustrative calculation for a fictional company: your line holds 12 percent of a market, the largest competitor holds 30 percent, so relative share is 0.4, and with the market growing at 14 percent a year that product is a question mark. Same product in a market growing at 2 percent and it is a dog. Nothing about the product changed; the instruction did.

What each quadrant means for the marketing plan

• Stars. Spend on awareness and distribution while the market is still forming preferences. Protect price. This is where share is cheapest to win, because buyers have not settled on anybody yet.
• Cash cows. Spend on retention, range extension and efficiency rather than on new buyer acquisition. Keep the cost of serving them down and do not let them go quietly stale, because a cash cow with no maintenance turns into a dog.
• Question marks. Pick two and starve the rest. Each one you back needs a named route to share and a date on which you will judge it. The honest version of this quadrant is a shortlist and a stop decision.
• Dogs. Decide whether each one is serving a purpose: completing a range, holding a contract, serving a key account. Where it is not, the kindest move is to simplify the portfolio and give the attention to a star.

Getting the data honestly

Market share needs a market size, and that is where most matrices wobble. Three practical routes: industry and trade association reports, which name their method; your distributors and retailers, who know their own category totals; and a bottom up estimate built from competitor counts and observable volumes. Record the source for every number on the chart. Where you are estimating competitor scale from public signals, how to check a competitor's web traffic explains how to read those estimates properly, and the structured approach in competitor analysis keeps the exercise pointed at a decision.

Where to use it, and what to pair it with

The matrix answers one question well: where should the money go across what we already sell. Pair it with two others for a complete picture. Ansoff's matrix covers growth direction, meaning existing or new products against existing or new markets. The GE and McKinsey nine box grid scores market attractiveness and competitive strength on several factors each, which suits portfolios where share alone does not capture the position. Refresh all of it annually, and more often in a fast moving category, so the chart reflects this year's market.

Build the output straight into the plan rather than leaving it in a deck: the marketing plan template gives each quadrant decision somewhere to live, and marketing terms and definitions covers the surrounding vocabulary.

This page covers the BCG growth share matrix and how to apply it. For the planning sequence it feeds into, see the marketing plan template above.

Where people get stuck on BCG matrix in marketing

What does BCG stand for in the BCG matrix?

Boston Consulting Group, the firm that created the framework in 1970. It is also called the growth share matrix, which describes what it plots.

What are the four quadrants of the BCG matrix?

Stars with high share in high growth markets, cash cows with high share in low growth markets, question marks with low share in high growth markets, and dogs with low share in low growth markets.

How do you calculate relative market share?

Divide your market share by the market share of the largest competitor in that market. A result above 1.0 means you lead the market, and 0.5 means you are half the size of the leader.

What is the BCG approach in marketing?

Using the matrix to allocate marketing budget across a portfolio: funding stars, holding cash cows efficiently, backing a shortlist of question marks, and simplifying out of dogs that serve no purpose.

What is the difference between the BCG matrix and a SWOT analysis?

The matrix compares the products in your portfolio against each other and ends in budget decisions. A SWOT describes the position of the whole business and ends in a summary. They answer different questions and are often used together.

How often should the matrix be redrawn?

Once a year for most portfolios, and every six months in a fast moving category. Keep the previous version alongside it, because the movement of a bubble between two years is more informative than its position in either one.

Plot your category on a different matrix

The matrix sorts products by market share and growth. A buyer who asks an assistant to compare products in your category gets a different sort: named or not named, first or fourth, described accurately or not. None of those positions sit on your chart, yet the reply arrives before any sales call. Add a column to the sheet: what the assistants say about each product line. AI Knows Us records which products and brands are named per question, so each row can be filled in.