The Boston Consulting Group Growth Share Matrix is a tool for determining which services or products a company should invest in, get rid of or retain. It utilizes four colorful categories, as well as various graphical charts to compare the company's products or services. The categories are as follows:
• Dogs - no good. They don't make much money, have a low market share and low growth rate and should be sold or otherwise liquidated.
• Cash cows - good. Predictably higher cash flows, larger market share and should be milked for as long as possible. The only down side is that they are typically seen in low growth market sectors, but their profitability makes up for this.
• Stars - good. High growth and large market share make stars better products to invest in more, since they have an opportunity to become a cash cow when the market stops growing as much.
• Question marks - basically an "I dunno." Fast-growing markets, but lower company market share, means these products could go either way.
Apparently they're not big dog-lovers in Boston.
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Finance: What is Hurdle Rate?62 Views
Finance allah shmoop shmoop what is ah hurdle rate Well
a hurdle rate refers to the investment return minimum that
an investment project requires for it to be worth taking
the risk and effort to do it in the first
place All right what does that really mean Well you're
the new ceo of baby's first chainsaw inc a project
manager present to you the opportunity to open a new
line of business called grand pas last chain saw going
into that business will cost you one hundred million box
of initial investment in large print labeling walker accessible attachments
jittery hand stabilizers and some extra denture cream You as
ceo are looking at eight other projects you can afford
to do on ly one and the best of the
eight other projects is a similar product called the unhinged
midlife crisis chainsaw which has been garnering a lot of
early interest That project has return rate of fourteen percent
so the project manager presenting grandpas last chainsaw now has
a hurdle rate that must be above the highest last
hurdle or fourteen percent fourteen percent annualized return got it
and that's as presented by the project manager pitching investment
in the mid life crisis model meaning they think it'll
return fourteen percent a year on the investment Got it
Whichever of those eight competitive project managers presents the most
believable projections for sales and profits that exceed the others
well they'll soon become king of the family chainsaw market
And the ones who don't well let's just say they 00:01:38.855 --> [endTime] use a few extra bodies over in product development
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