Growth Share Matrix Flashcards, test questions and answers

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What is Growth Share Matrix?

Growth Share Matrix is a tool used to analyze and classify products in terms of their market share and rate of growth. It is also known as the Boston Consulting Group (BCG) matrix. The Growth Share Matrix was developed by Bruce Henderson, founder of the Boston Consulting Group in 1970, to help corporations with portfolio management decisions. It provides an overview of the company’s product offerings and can be used to identify and prioritize opportunities for growth.The Growth Share Matrix plots two variables: market share and growth rate. Market share refers to how much of the total market a company’s product or service accounts for relative to its competitors. Growth rate refers to how quickly demand is increasing for that particular product or service relative to other products in the same industry. The matrix consists of four quadrants: Stars, Cash Cows, Dogs, and Question Marks. Each quadrant represents different types of products or services within a company’s portfolio which need different levels of attention from managers depending on which quadrant they fall into. Stars are high-growth/high-share products which require significant investment from managements so that they can continue growing at such high rates and maintain their large market share against competitors. Cash Cows are low-growth/high-share products which require very little investment from managements as their large market share usually makes them highly profitable without any additional resources needed for marketing or development purposes. Dogs are low-growth/low-share products that do not generate much revenue nor have any potential for future growthin this case it would be wise for management resources focused on these areas be diverted elsewhere instead where more value can be created instead; these are sometimes referred too as cash traps since they tend not to generate any profits despite huge investments being made into them by companies due their low demand in markets today relative other offerings available today from competitors instead who have superior features offered over them at lower prices too often times too.