Key Idea: The BCG matrix places each product by two figures: how fast its market grows, and how big its share is against the leader. This topic is the four boxes, placing a portfolio, and deciding what each product gets next.
The four boxes
- Star: high growth, high share, like wholesale to cafés.
- Cash cow: low growth, high share, like the shop loaves.
- Question mark: high growth, low share; dog: low growth, low share.
Placing a product
- Market growth: this year's market against last year's.
- Relative share: its share against the biggest rival's.
- Loaves: $960,000 against Goldcrust's $880,000 is 1.09, a high share.
Managing the portfolio
- Build a star or a promising question mark.
- Hold or harvest a cash cow, and use its cash for the others.
- Divest a dog unless it supports the rest of the range.
The BCG matrix: market growth up the side, relative market share across, high share on the left.
Interactive diagram
Explore the labelled diagram, charts and maps for this topic in study mode.
The words to know
| Word | Means | Do not confuse with |
|---|---|---|
| Market growth | how fast the whole market is growing | the product's own sales growth |
| Relative market share | a product's share compared with the largest rival's | its share of the whole market |
| Cash cow | a product with a high share of a slow-growing market that brings in more cash than it needs | a star |
| Question mark | a product with a low share of a fast-growing market that needs cash to grow | a dog |
Place each product with both figures, growth and share, then say what the box means for cash and what the business should do with it.
Exam-style question
Lena's Bakery Ltd's lunches sold $160,000 in 2025 in a lunch market that grew 25% to $2,500,000, where Crumbline plc holds 30%. Its wholesale sales to cafés hold 40% of a market that grew 20%. Using the BCG matrix, explain the position of these two products.
Model answer plan
See the mark-by-mark plan — for / against / judgement, with marking guidance — in study mode.
Important: The boxes come from market growth and relative share, not from how profitable a product is. And measure share in the right market: the loaves lead the town's bakeries, not the supermarkets.
Tap each card to check yourself.
Why are the shop loaves a cash cow? The bakery market barely grows (6.7%), and Lena's leads it: 1.09 times Goldcrust's sales.
What is the white sliced loaf? A dog. Low share in a market that is not growing.
What does a cash cow's cash pay for? Building the stars and question marks, such as lunches at Station Road.
When might a business keep a dog? When it brings customers in who buy other products, or its costs are already covered.
One limitation of the BCG matrix? It uses only two measures, ignores profit, and the market's definition changes the placing.
What happens to a star as its market slows? If it keeps its share, it becomes a cash cow.
Exam tips
- Place every product with both figures: growth and relative share.
- Say what the box means for cash: earns it or needs it.
- Recommend build, hold, harvest or divest for each product.
- Define the market before measuring share.
- Use the case's own figures, not general descriptions.