Boston Consulting Group growth-share matrix


Boston Consulting Group growth-share matrix
A technique for analysing the potential of a business or business unit by plotting market share against growth rate. The matrix, commonly known as the Boston matrix or Boston box, was developed by the Boston Consulting Group (BCG) in the 1970s. It is used to help large diversified firms identify those business units or products that generate cash and those that use it, so that an overall strategy can be developed. It can also be used as a tool of portfolio management. Four main categories are displayed in a two-dimensional matrix:
• a star is a high-growth business competing in a market where it is relatively strong compared with the competition.
• a cash cow is a low-growth business with a relatively high market share. These are mature, successful businesses with relatively little need for investment.
• a question mark (or problem child) is a business with low market share but which operates in higher growth markets.
• a dog is a business with a low market share in a low-growth market.

Accounting dictionary. 2014.

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