── ── Cognitive bias

BCG Growth-Share Matrix

Maps each business unit on a 2×2 grid of market growth rate vs. relative market share, revealing which units generate cash, which absorb it, and which to invest in, harvest, or exit. Four quadrants: Stars (invest), Cash Cows (harvest), Question Marks (binary decide), Dogs (exit or hold minimally). Rests on two empirical anchors: experience curve (high share = lowest cost)…

How it works

Produce a Portfolio Map — quadrant assignments, trend arrows, and resource-allocation recommendations per SBU.

Step 1 — Define SBUs. Must: serve an identifiable customer group, have identifiable competitors, be manageable with resource independence. Stop rule: if you cannot name the primary competitor, the boundary is wrong.

Step 2 — Market growth rate. 2–3 years external data; calculate CAGR. Dividing line: 10% (raise to 20–30% for AI/clean-tech). Never use own revenue growth as a proxy.

When to use it

• user says "portfolio review," "cash cow," "Stars and Dogs," "growth-share matrix," "which business should we fund," or "resource allocation across units"
• firm has multiple business units competing for shared capital
• investor or board discussion needs a visual portfolio health read

Worked example

Procter & Gamble's Brand Portfolio Restructuring (2012–2016)

P&G's executive team, led by CEO A.G. Lafley, executed the most visible BCG-style portfolio restructuring of the 2000s — publicly framing it in terms nearly identical to the matrix's logic.