Growth/Share Matrix
Evaluate business units based on growth and market share
This framework outlines the key considerations for evaluating business units based on growth and market share. It highlights the importance of identifying cash cows, dogs, stars, and question marks, and managing the portfolio accordingly.
- Identify cash cows, dogs, stars, and question marks in the portfolio
- Manage the portfolio to maximize returns and minimize risk
- Focus on creating value through operational improvements rather than just financial engineering
- Identify Cash Cows, Dogs, Stars, and Question MarksDetermine which business units are cash cows, dogs, stars, and question marks, based on their growth and market sharePro tipConsider the competitive position of each business unit and the potential for growth and profitabilityWarningFailing to identify cash cows, dogs, stars, and question marks may lead to poor portfolio management and reduced returns
- Manage the Portfolio to Maximize Returns and Minimize RiskManage the portfolio to maximize returns and minimize risk, by investing in stars and question marks, and harvesting or divesting dogsPro tipFocus on creating value through operational improvements rather than just financial engineeringWarningFailing to manage the portfolio may lead to poor returns and reduced profitability
Procter and Gamble's Portfolio Management
Procter and Gamble used the Growth/Share Matrix to evaluate its business units and manage its portfolio, resulting in significant returns and growth
OutcomeThe company was able to maximize returns and minimize risk through effective portfolio management
Failing to Identify Cash Cows, Dogs, Stars, and Question Marks
Failing to identify cash cows, dogs, stars, and question marks may lead to poor portfolio management and reduced returns
Failing to Manage the Portfolio
Failing to manage the portfolio may lead to poor returns and reduced profitability
The Growth/Share Matrix was developed by the Boston Consulting Group as a tool for evaluating business units and managing a portfolio of businesses.
Source · BOOK
Competitive Strategy