The BCG matrix, also known as the BCG growth-share matrix, growth market share matrix, or

product portfolio matrix, helps businesses with the long-term planning of their products. This

tool helps companies determine which products warrant discontinuing, development, or further

investing.

Many businesses offer a variety of products to their customers, such as Johnson & Johnson. They

offer a wide array of health and beauty products to customers. Some of these products include

soap and lotion for all ages, facial cleansers, make-up wipes, pain relievers, and allergy

medication.

With all these products, Johnson & Johnson needs to monitor the success of each of these

products to figure out whether they should invest more into the products, discontinue them, or

create a new product to replace the old one. This is where the BCG matrix can help.

The four quadrants of the BCG matrix

The BCG matrix fits products into one of four categories. The placement is based on market
growth and market share. Each product falls into a different quadrant, which helps your business
decide how to deal with different products.

Dogs
Dogs are products with low growth and low market share. These products are typically viewed as
a waste. Money gets tied up into these products, but they do not produce enough of a profit to
justify the investment.

Question Marks
Question Marks, also known as “Problem Child,” are products in a high growth market with low
market shares. These products are called question marks because it is unclear which way they
will swing. Will they rise into the Stars quadrant, or will they drop down to Dogs?
Stars
Products that are Stars have a high market share in high-growth markets. These products have
the potential to become market leaders. They can eventually become Cash Cows, a quadrant that
we’ll discuss next).

Cash Cows
Cash Cows are products that have a high market share in low-growth market. These are products
that drive revenue for your business. These are the four quadrants of the BCG matrix. This
matrix can help you see where your products fall and help you decide how to proceed next.We
know what the BCG matrix is, as well as the four components that define the Boston Consulting
Group's matrix. The most value from the growth-share matrix, however, comes from
understanding how to use it.

Now using the BCG matrix, based on each quadrant, we can see the following analysis as
below:

Dogs
Dogs have a small chance of bringing your business a profit. Either remove Dog products or
continue to offer them, without any further investment from your business.Many companies end
up pumping money into Dogs and get little in return. Most businesses remove Dog products as
these items generally drain resources and waste money.Some Dog products can generate a small
amount of revenue at a small cost, however.This scenario happens with discontinued products.

Question Marks
Question Marks can become either Stars or Dogs, which is why they demand investing and
development to deliver a return. Determine how much a Question Mark is worth to your business
before proceeding.Question Marks are tricky because you can invest a large sum of money into
them and see no success. It requires a lot of time and investment to get these products into the
Star quadrant. You need to invest a good chunk of money to get a return on these products.This
is a common issue that game developers face.

Stars
Stars require cash to produce cash. Invest in Stars, but ensure they deliver a return, to turn them
into Cash Cows.If you want to harness the full potential of Stars, you need to invest money in
these products constantly. They bring in a lot of cash for your business, but they also consume a
lot of cash in the process.Stars are important to your business because they ensure future growth.
When you have products that are Stars, they turn into Cash Cows.

Cash Cows
Cash Cows perform consistently, especially when it comes to ROI. Milk these products by
continuing to support and invest in their success.Cash Cows are well-established products that
people trust and buy consistently. Brand names like iPhones, Tide, Charmin, and Crest are all
Cash Cows. These are household names of brands that have built their reputation to attract
people to buy them.