The BCG matrix thus helps to determine where a business currently sits in relation to other

businesses in regards to its market share and market growth. (Insert this in 2nd para just
before the sentence “analysing products in this way…”)

Where businesses’ products fall on the graph will make them a “dog”, “cash cow”, “star” or
“question mark”. The graph provides hence a holistic picture and guides businesses where
best to invest. (insert this after 2nd para, thus make it a 3rd para)

But what do these quadrants mean?

Dog (Low market growth and Low market share)

Products classified as dogs always have a weak market share in a low growth market. Such
products offer little to the business either in terms of existing sales and cash flow or future
prospects because the market is not growing.

These products are often a big drain on management and resources. They are regarded as
cash traps. They may need to be replaced shortly or the firm may decide to withdraw them
from their market sector and position it in faster growing sectors.

Cash Cow (Low market growth and High market share)

Cash cow products are well established products in the market. These types of products
create a high positive cash flow and are profitable. Sales are high relative to the market and
promotional costs are likely to be low as a result of high consumer awareness. The cash
from this product can be “milked” and injected into some of the other products in the
portfolio. A business will want to maintain cash cow products for as long as possible.

P.S

I found this very cute and interesting sentence. You may add it in your explanation of stars.

Stars are bright and shiny and on their way up, they can attract investment and help a
business to gain or maintain a dominant position in a space of large market growth.