The growth-share matrix
A portfolio tool from BCG that maps units by relative share and market growth to guide investment, harvest and exit decisions.
author
Bruce D. Henderson, Boston Consulting Group
Model type
About
How it works – Axes
X Axis: Relative market share: your share divided by the largest competitor’s share. Proxy for scale and experience-curve effects.
Y Axis: Market growth rate: proxy for investment need. Historically a 10 percent threshold was used; better to set a context-specific cut-off.
X Axis: Relative market share: your share divided by the largest competitor’s share. Proxy for scale and experience-curve effects.
Y Axis: Market growth rate: proxy for investment need. Historically a 10 percent threshold was used; better to set a context-specific cut-off.
Quadrants & default plays
Stars: High growth, high share. Invest to maintain leadership; aim to become future Cash Cows.
Cash Cows: Low growth, high share. Optimise, “milk” cash; fund Stars/selected Question Marks.
Question Marks: High growth, low share. Decide: invest hard to win share or exit quickly.
Dogs: Low growth, low share. Harvest/exit unless they serve a clear strategic role (e.g. synergy, regulatory anchor).
Stars: High growth, high share. Invest to maintain leadership; aim to become future Cash Cows.
Cash Cows: Low growth, high share. Optimise, “milk” cash; fund Stars/selected Question Marks.
Question Marks: High growth, low share. Decide: invest hard to win share or exit quickly.
Dogs: Low growth, low share. Harvest/exit unless they serve a clear strategic role (e.g. synergy, regulatory anchor).
Use cases
1. Annual portfolio review to set capex, opex and marketing budgets by BU or SKU.
2. Strategic planning for category entries and withdrawals; brand pruning.
3. Value-creation planning to identify “funders” (Cows) and “funded” (Stars/selected QMs).
4. Making investment decisions – see my article on The Star Principle for more
2. Strategic planning for category entries and withdrawals; brand pruning.
3. Value-creation planning to identify “funders” (Cows) and “funded” (Stars/selected QMs).
4. Making investment decisions – see my article on The Star Principle for more
how to apply
1. Define the market precisely per unit/SKU (avoid over-broad categories).
2. Compute relative market share vs the largest rival; pick a growth threshold that matches market physics.
3. Place each unit, then size the bubble by revenue or gross profit.
4. Stress test with forward-looking scenarios (price wars, new entrants, channel shifts).
5. Decide capital moves by quadrant, then layer constraints: capability, synergy, regulatory, and cash limits.
2. Compute relative market share vs the largest rival; pick a growth threshold that matches market physics.
3. Place each unit, then size the bubble by revenue or gross profit.
4. Stress test with forward-looking scenarios (price wars, new entrants, channel shifts).
5. Decide capital moves by quadrant, then layer constraints: capability, synergy, regulatory, and cash limits.
pitfalls and cautions
1. Over-simplification: profitability, unit economics and moats vary even at similar share/growth.
2. “Dogs” can be strategically valuable as complements, gateways or for regulatory presence.
3. Growth thresholds should be relative to industry lifecycle, not a fixed 10 percent.
4. Share is not a moat if network effects, switching costs or IP sit elsewhere.
5. Static snapshots mislead; use rolling LTM or multi-year views.
2. “Dogs” can be strategically valuable as complements, gateways or for regulatory presence.
3. Growth thresholds should be relative to industry lifecycle, not a fixed 10 percent.
4. Share is not a moat if network effects, switching costs or IP sit elsewhere.
5. Static snapshots mislead; use rolling LTM or multi-year views.