What does the BCG Matrix help evaluate?

The BCG Matrix, developed by the Boston Consulting Group, is a strategic tool used to evaluate business units or product lines based on two key dimensions: market growth rate and relative market share. By plotting business units on this matrix, organizations can categorize them into four quadrants—Stars, Question Marks, Cash Cows, and Dogs—each representing different strategic implications based on their performance and potential.

This evaluation helps management make informed decisions about where to allocate resources, which units to invest in, which to develop or divest, and how best to position a portfolio of products or services in relation to the competitive landscape. This systematic approach provides insights into both current performance and future potential, guiding strategic planning effectively.