{"id":1967,"date":"2013-07-07T22:35:42","date_gmt":"2013-07-08T05:35:42","guid":{"rendered":"https:\/\/masonmyers.com\/?p=1967"},"modified":"2015-01-28T12:58:41","modified_gmt":"2015-01-28T20:58:41","slug":"bcg-growth-share-matrix-cash-cows-dogs-stars","status":"publish","type":"post","link":"https:\/\/masonmyers.com\/bcg-growth-share-matrix-cash-cows-dogs-stars\/","title":{"rendered":"BCG Growth Share Matrix of Cash Cows, Dogs, and Stars"},"content":{"rendered":"<p><div id=\"attachment_1969\" style=\"width: 310px\" class=\"wp-caption alignright\"><a href=\"https:\/\/masonmyers.com\/wp-content\/uploads\/2013\/07\/bcg-growth-share-matrix.jpg\"><img aria-describedby=\"caption-attachment-1969\" decoding=\"async\" loading=\"lazy\" class=\" wp-image-1969\" title=\"BCG Growth Share Matrix\" src=\"https:\/\/masonmyers.com\/wp-content\/uploads\/2013\/07\/bcg-growth-share-matrix-300x231.jpg\" alt=\"\" width=\"300\" height=\"231\" srcset=\"https:\/\/masonmyers.com\/wp-content\/uploads\/2013\/07\/bcg-growth-share-matrix-300x231.jpg 300w, https:\/\/masonmyers.com\/wp-content\/uploads\/2013\/07\/bcg-growth-share-matrix-150x115.jpg 150w, https:\/\/masonmyers.com\/wp-content\/uploads\/2013\/07\/bcg-growth-share-matrix.jpg 792w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/><\/a><\/p>\n<p id=\"caption-attachment-1969\" class=\"wp-caption-text\">Growth share matrix from BCG, developed in 1968.<\/p>\n<\/div>\n<p>Older ideas, seen anew, can be helpful to business owners. \u00a0In that spirit,\u00a0I have highlighted <a title=\"Economies of Scale \u2014 Fundamentals Through Graphics\" href=\"https:\/\/masonmyers.com\/economies-of-scale-business-fundamentals\/\">Economies of Scale<\/a> and <a title=\"Five Forces by Michael Porter \u2014 Fundamentals Through Graphics\" href=\"https:\/\/masonmyers.com\/five-forces-michael-porter-business-fundamentals\/\">Michael Porter&#8217;s Five Forces<\/a> previously. \u00a0Today,\u00a0I highlight another older idea in the Boston Consulting Group (BCG) Growth Share Matrix that was developed by the global consulting group\u00a0in 1968. \u00a0It is another\u00a0simple, but helpful, framework for thinking about elements of your business.\u00a0 It provides one lens on how to prioritize and manage a portfolio of projects, initiatives, businesses, or any other elements of a portfolio.\u00a0 In other posts I have explored how helpful frameworks like this one can be used in <a title=\"Investment Wisdom Convergence from Clayton Christensen and Charlie Munger\" href=\"https:\/\/masonmyers.com\/investment-wisdom-double-whammy-from-clayton-christensen-and-charlie-munger\/\">&#8220;theories and frameworks&#8221; as with Clayton Christensen at the Harvard Business School and with &#8220;mental models&#8221; from Charlie Munger of Berkshire Hathaway<\/a>.<\/p>\n<h2>BCG Growth Share Matrix<\/h2>\n<p>BCG&#8217;s Growth Share Matrix focuses on two concepts: market share and market growth.\u00a0 Their classic 2 x 2 matrix creates four quadrants.<\/p>\n<ul>\n<li><strong>All Stars.\u00a0<\/strong> These are projects that have a high market share and high growth.\u00a0 The idea is that you should keep investing in these stars to maximize your opportunities.<\/li>\n<li><strong>Question Marks.\u00a0<\/strong> With high growth but low market share, the question is to weigh carefully the risks and rewards of these projects or businesses: whether or not your project can survive in the long term with a low market share.<\/li>\n<li><strong>Cash Cows.<\/strong>\u00a0 BCG suggests these should be milked for cash as they have high market share and low growth.\u00a0 Often, I think these types of businesses are undervalued even though they could remain as solid contributors to your overall effort for a long time to come.<\/li>\n<li><strong>Dogs.<\/strong>\u00a0 BCG advises to divest dogs that have low market share and low growth.<\/li>\n<\/ul>\n<p>Developed with business conglomerates in mind, this framework can still be applied to other portfolios such as a portfolio of products or services. \u00a0If you own one business, this framework may also help you decide how to manage your business. \u00a0If it is a cash cow, maybe you are better off milking the cash cow and diversifying your investments into other assets. \u00a0Or if you own a dog, maybe it is time to sell it to a leader in the industry and focus your efforts elsewhere.<\/p>\n<p>In my <a title=\"Greybull Stewardship Business Investment Fund | Business Financing, Funding Sources\" href=\"https:\/\/greybullstewardship.com\/\" target=\"_blank\">Greybull Stewardship investments<\/a> I look for Stars who need some capital or some management bandwidth to ride the market growth opening for them, or occasionally I look for Cash Cows generating cash that can be used to invest in Stars.<\/p>\n<p>In addition to the BCG Growth Share Matrix, below are some of my posts on other charts, graphs, and frameworks.<\/p>\n<ul>\n<li><a title=\"Chart of Most Profitable Industries \u2014 Increase Your Odds of Business Success\" href=\"https:\/\/masonmyers.com\/business-profitability-chart\/\">Charts of Most Profitable Industries &#8212; Increase Your Odds of Business Success [masonmyers.com August 28th, 2012]<\/a><\/li>\n<li><a title=\"Rich vs King? Spoils Go To Business Owners Who Delegate &amp; Share\" href=\"https:\/\/masonmyers.com\/business-owners-delegate-rich-versus-king\/\">Rich vs King?\u00a0 Spoils Go To Business Owners Who Delegate &amp; Share [masonmyers.com November 6th, 2012]<\/a><\/li>\n<li><a title=\"Kissing a Lot of Frogs: Smaller Companies Must Work to Find Investment Financing\" href=\"https:\/\/masonmyers.com\/investment-financing-smaller-companies\/\">Business Investment Shortage for Small Businesses [masonmyers.com January 3rd, 2013]<\/a><\/li>\n<li><a title=\"Economies of Scale \u2014 Fundamentals Through Graphics\" href=\"https:\/\/masonmyers.com\/economies-of-scale-business-fundamentals\/\">Economies of Scale [masonmyers.com August 14th 2012]<\/a><\/li>\n<li><a title=\"Five Forces by Michael Porter \u2014 Fundamentals Through Graphics\" href=\"https:\/\/masonmyers.com\/five-forces-michael-porter-business-fundamentals\/\">Five Forces by Michael Porter [masonmyers.com February 3rd, 2013]<\/a><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<div class=\"zemanta-pixie\" style=\"margin-top: 10px; height: 15px;\"><a class=\"zemanta-pixie-a\" title=\"Enhanced by Zemanta\" href=\"http:\/\/www.zemanta.com\/?px\"><img decoding=\"async\" class=\"zemanta-pixie-img\" style=\"border: none; float: right;\" src=\"http:\/\/img.zemanta.com\/zemified_e.png?x-id=a3343612-69a5-450d-bd42-29b6e66ee305\" alt=\"Enhanced by Zemanta\" \/><\/a><\/div>\n<div class=\"postmeta_wrapper\">\n<div class=\"postmeta classifications small\"><span class=\"post_categories\">Categories:<a href=\"https:\/\/masonmyers.com\/category\/charts-graphs\/\" rel=\"category tag\">Charts &amp; Graphs<\/a>, <a href=\"https:\/\/masonmyers.com\/category\/competitive-advantage-and-differentiation\/\" rel=\"category tag\">Competitive Advantage &amp; Differentiation<\/a><\/span><br \/><span class=\"post_tags\">Tags:<a href=\"https:\/\/masonmyers.com\/tag\/bcg\/\" rel=\"tag\">BCG<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/berkshire-hathaway\/\" rel=\"tag\">Berkshire Hathaway<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/boston-consulting-group\/\" rel=\"tag\">Boston Consulting Group<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/business-growth-strategy\/\" rel=\"tag\">Business Growth Strategy<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/business-strategy\/\" rel=\"tag\">Business Strategy<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/charlie-munger\/\" rel=\"tag\">Charlie Munger<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/clayton-christensen\/\" rel=\"tag\">Clayton Christensen<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/competitive-advantage\/\" rel=\"tag\">Competitive Advantage<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/differentiation\/\" rel=\"tag\">Differentiation<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/financial-strategy\/\" rel=\"tag\">Financial Strategy<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/financing\/\" rel=\"tag\">Financing<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/greybull-stewardship\/\" rel=\"tag\">Greybull Stewardship<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/growth-share-matrix\/\" rel=\"tag\">Growth Share Matrix<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/harvard-business-school\/\" rel=\"tag\">Harvard Business School<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/investment\/\" rel=\"tag\">Investment<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/investment-strategy\/\" rel=\"tag\">Investment Strategy<\/a>, <a href=\"https:\/\/masonmyers.com\/tag\/warren-buffett\/\" rel=\"tag\">Warren Buffett<\/a><br \/><\/span><\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"<p>Older ideas, seen anew, can be helpful to business owners. \u00a0In that spirit,\u00a0I have highlighted Economies of Scale and Michael Porter&#8217;s Five Forces previously. \u00a0Today,\u00a0I highlight another older idea in the Boston Consulting Group (BCG) Growth Share Matrix that was developed by the global consulting&hellip; <a class=\"more-link\" href=\"https:\/\/masonmyers.com\/bcg-growth-share-matrix-cash-cows-dogs-stars\/\">Continue reading <span class=\"meta-nav\">&rarr;<\/span><\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[163,5],"tags":[244,30,242,91,89,154,122,38,96,84,47,13,243,68,86,121,29],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.0 - 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