If we look at the four squares of the BCG zoo and try to predict cash ﬂow for the next 3.5 years, we begin to make out certain patterns. The dog or the star should have a minimal positive or negative cash ﬂow. The cash cowdeliversvery positive cash ﬂow, while the wildcat has negative cash ﬂow.When portfolio strategy was in its infancy, balancing the cash ﬂow was oneof group management’s most important functions. The theory was that cashﬂow should be created in the cash cow and invested in the wildcatting order to increase market share and reach a strong competitive position. This wouldthen bring the unit into the star square. When the market gradually stoppedgrowing, the star business would tumble into the cash cow.The underlying idea of the BCG matrix is that the best strategy is todominate market share when the market is mature. The thinking goes likethis:
Proﬁtability is greatest when the market matures.
A dominating market share gives the highest accumulated productionvolume.
According to the experience curve, high volume leads to lower productioncosts.
Low production costs can either be used to lower prices and take marketshare, or to increase proﬁt margins.
MAIN ASPECTS OF THE BCG GROWTH-SHARE MATRIX
TheBCG Growth-Share Matrixis based on two dimensional variables:relative market share and market growth. They often are pointers tohealthiness of a business (Kotler 2003; McDonald 2003). In other words,