The unknowns: These business units or product lines have relatively small market shares within high-growth industries. This typically means that, although they generate significant revenue, they also require additional funding to make sure that they keep up with their competition, and they're likely to turn into cash cows or dogs at some point in the future as the industry's growth declines. The stars: These business units or product lines have large market shares in fast-growing industries. This typically means that they're not likely to generate any significant earnings or losses, but they may be valuable to the parent organization because they synergize well with other business units. The dogs: These business units or product lines have a relatively small market share within a slow-growing and mature industry. This typically means that they can generate significant revenue without the main organization needing to invest great amounts to keep up with the competition. The cash cows: These business units or product lines have a large share of their market in a slow-growing industry. The BCG matrix chart is divided into four categories, where each business unit or product line is represented based on its relative market share and growth rate.

It takes the form of a chart, where the y-axis represents the rate of market growth and the x-axis represents market share. Besides potentially improving resource allocation, this matrix also helps companies make more effective business decisions regarding product management, strategic planning and brand marketing. The BCG matrix, also called the growth share matrix, is a planning tool created by the Boston Consulting Group that helps organizations analyze their different business units and product lines and efficiently allocate resources between them. Related: Management Skills: Definition and Examples What is the BCG matrix?

In this article, we discuss what the BCG matrix is and explain when and how to use it. Before you can start making these decisions, it's important to learn to use the BCG matrix. Regardless of your role within the company's management team, understanding the BCG matrix can help you make better decisions when managing your organization's investment portfolio.

The BCG matrix is a framework designed to help organizations with their long-term planning.

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