Determine how much a Question Mark is worth to your business before proceeding. Summary: Question Marks can become either Stars or Dogs, which is why they demand investing and development to deliver a return. While it won’t earn your business a rapid, daily income, Dogs can be a product that earns your business a small profit occasionally. If someone owns a car that is no longer manufactured, they will still need replacement parts for that car if something goes wrong, for example. This scenario happens with discontinued products. They won’t generate a large amount of revenue, but they can generate a little cash flow for your business. While most Dog products are bad for business, some benefit your business. Some Dog products can generate a small amount of revenue at a small cost, however. Most businesses remove Dog products as these items generally drain resources and waste money. Many companies end up pumping money into Dogs and get little in return.
Either remove Dog products or continue to offer them without any further investment from your business. Summary: Dogs have a small chance of bringing your business a profit. Learn more about using the BCG matrix, based on each quadrant, below: Dogs
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The most value from the growth-share matrix, however, comes from understanding how to use it. You know what the BCG matrix is, as well as the four components that define the Boston Consulting Group’s matrix. Learn about the 4 Ps of marketing How to use the BCG matrix
This matrix can help you see where your products fall and help you decide how to proceed next. These are the four quadrants of the BCG matrix. These are products that drive revenue for your business. Cash CowsĬash Cows are products that have a high market share in low-growth market. They can eventually become Cash Cows, a quadrant that we’ll discuss next). These products have the potential to become market leaders. Products that are Stars have a high market share in high-growth markets. Will they rise into the Stars quadrant, or will they drop down to Dogs? Stars These products are called question marks because it is unclear which way they will swing. Question Marks, also known as “Problem Child,” are products in a high growth market with low market shares. Money gets tied up in these products, but they do not produce enough of a profit to justify the investment. These products are typically viewed as a waste. Each product falls into a different quadrant, which helps your business decide how to deal with different products.ĭogs are products with low growth and low market share. The placement is based on market growth and market share. The BCG matrix fits products into one of four categories. With all these products, Johnson & Johnson needs to monitor the success of each of these products to figure out whether they should invest more into the products, discontinue them, or create a new product to replace the old one. These products include soap and lotion for all ages, facial cleansers, make-up wipes, pain relievers, and allergy medication. They offer a wide array of health and beauty products to customers. Many businesses offer a variety of products to their customers, such as Johnson & Johnson. This tool helps companies determine which products warrant discontinuing, development, or further investing. The BCG matrix, also known as the BCG growth-share matrix, growth market share matrix, or product portfolio matrix, helps businesses with the long-term planning of their products. 5.2 million Client phone calls What is the BCG matrix?
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