B.C.G. analysis
B.C.G. analysis is a technique used in brand marketing, product management, and strategic management to help a company decide what products to add to its product portfolio. It involves rating products according to their market share and market growth rate. The products are then plotted on a two dimensional map. Products with high market share but low growth are referred to as "cash cows". Products with high market share and high growth are referred to as "stars". Products with low market share and low growth are referred to as "dogs" and should usually be discontinued. Products with low market share but high growth are referred to as "question marks" or "problem children". The technique can also be applied to a portfolio of companies.
Each circle represents a product or brand. The size of the circle indicates its dollar sales volume.
A "question mark" has the potential to become a "star" in the future if it is developed. A company should have a balanced portfolio. This implies having at least one "cash cow" which can generate revenue that can be used to develop one or more "question mark". This process, referred to as "milking your cash cow", is shown in the next diagram where the arrows represent cash flows.
B.C.G. Analysis was originally developed by Bruce Henderson at the Boston Consulting Group in the early 1970s.
see also product management, product portfolio, New Product Development, G.E. Multi Factoral analysis, marketing, strategic management