The BCG Matrix shows that business success depends on how cash is allocated over those same products. More precisely high market shares products will also bring high margins and cash and vice versa. Cash cow, dog, star and the question mark are the key components of the BCG matrix diagram below.
The BCG Matrix is a business framework that explains the lifecycle of products. There are four types of scenarios, Stars, Cash Cows, Dogs and Question Marks. Depending on where you are in the BCG diagram, you should follow a different strategy, including increasing investments or divesting.
The BCG Matrix explains how a company should manage its portfolio according to their growth and relative market share. BCG matrix diagram below is a great tool to help companies decide on their business strategy.