{"id":109015,"date":"2026-10-26T08:23:28","date_gmt":"2026-10-26T08:23:28","guid":{"rendered":"https:\/\/mailrelay.com\/blog\/2026\/10\/26\/bcg-matrix\/"},"modified":"2026-10-26T13:15:40","modified_gmt":"2026-10-26T13:15:40","slug":"bcg-matrix","status":"publish","type":"post","link":"https:\/\/mailrelay.com\/en\/blog\/2026\/10\/26\/bcg-matrix\/","title":{"rendered":"BCG matrix: what it is, its 4 quadrants and how to build one for your business"},"content":{"rendered":"\n

Do you know which products in your catalog keep you afloat and which ones just eat up your time? Many companies aren’t sure. And they keep splitting the budget evenly, as if every product were worth the same.<\/p>\n\n

The BCG matrix<\/strong> was created to answer that question. It’s a simple tool you can read at a glance, and it has been in strategy textbooks for more than fifty years.<\/p>\n\n

The BCG matrix is an analysis tool that sorts a company’s products or businesses into four groups (stars, cash cows, question marks and dogs) based on the growth of their market and their relative market share.<\/strong> It helps you decide which ones to invest in, which to keep and which to drop.<\/p>\n\n

Below you’ll see where it comes from, how to read each quadrant, how to build your own step by step and what to communicate to your customers depending on the type of product.<\/p>\n\n\n

What the BCG matrix is and where it comes from<\/h2>\n\n

The BCG matrix is named after the Boston Consulting Group<\/strong>, the consulting firm that created it. It is also known as the Boston matrix, the BCG matrix<\/em> or the growth-share matrix<\/em>.<\/p>\n\n

The first version was drawn by Alan Zakon, a consultant at the firm. Its founder, Bruce Henderson, popularized it in 1970<\/strong> in his essay The Product Portfolio<\/em>.<\/p>\n\n

According to the firm itself, at its peak about half of the Fortune 500 companies were using it.<\/p>\n\n

Its success comes down to how easy it is to understand.<\/p>\n\n

It boils a complicated decision, how to split money across several products, down to a picture with four boxes.<\/p>\n\n

That said, it’s no substitute for a full analysis. It works best alongside other strategic marketing<\/a> tools such as the Business Model Canvas<\/a>, SWOT analysis<\/a>, PESTEL analysis<\/a> or Porter’s 5 forces<\/a>.<\/p>\n\n

The two axes of the BCG matrix<\/h2>\n\n

The matrix is built on two variables. Each product is placed at the point where they meet.<\/p>\n\n

The vertical axis is the market growth rate.<\/strong> It measures how attractive the market the product competes in is.<\/p>\n\n

A fast-growing market offers opportunities, but it also requires investment so you don’t fall behind.<\/p>\n\n

The horizontal axis is relative market share.<\/strong> It isn’t simply your share, but your share divided by that of your largest competitor.<\/p>\n\n

If the result is greater than 1, you’re the leader. If it’s less, someone is selling more than you.<\/p>\n\n

Where is the line between “high” and “low”? The original matrix doesn’t give a fixed figure.<\/p>\n\n

The usual approach is to use your industry average as the benchmark for growth and the value 1 for relative share.<\/p>\n\n

The 4 quadrants of the BCG matrix<\/h2>\n\n

Crossing the two axes gives you four quadrants. Each one has an easy-to-remember name and an associated strategy:<\/p>\n\n

Quadrant<\/th>Market growth<\/th>Relative share<\/th>What to do<\/th><\/tr><\/thead>
Star<\/td>High<\/td>High<\/td>Invest to keep the lead<\/td><\/tr>
Cash cow<\/td>Low<\/td>High<\/td>Maintain it and use its cash for other products<\/td><\/tr>
Question mark<\/td>High<\/td>Low<\/td>Decide: invest so it grows or abandon it<\/td><\/tr>
Dog<\/td>Low<\/td>Low<\/td>Reposition, sell off or withdraw<\/td><\/tr><\/tbody><\/table><\/figure>\n\n
\"BCG<\/figure>\n\n

1. Stars: growing and leading<\/h3>\n\n

Stars are the leading products in growing markets.<\/strong> They sell a lot, but they also consume a lot of cash. You have to defend their position against competitors who want a piece of it, and it pays to know what your competitive advantage<\/a> is.<\/p>\n\n

The strategy is to invest: in the product, in communication and in distribution.<\/p>\n\n

If you do it well, they will become cash cows when the market matures.<\/p>\n\n

2. Cash cows: the money that funds everything else<\/h3>\n\n

Cash cows lead in markets that are no longer growing.<\/strong> They have loyal customers and don’t need large investments.<\/p>\n\n

That’s why they generate more cash than they consume.<\/p>\n\n

That cash is what pays for the stars and the question marks.<\/p>\n\n

The most common mistake is neglecting them: if you stop looking after their customers, they can turn into dogs before their time.<\/p>\n\n

3. Question marks: the big unknown<\/h3>\n\n

Question marks are in growing markets, but with little share.<\/strong> They are also called “problem children” or “wildcats”.<\/p>\n\n

They have potential, but they haven’t yet proven they can lead.<\/p>\n\n

This is where you have to decide. You can invest to turn them into stars or pull out before you spend too much. A small version, in the style of a minimum viable product<\/a>, helps you decide based on data. The worst option is to go halfway.<\/p>\n\n

4. Dogs: low growth and low share<\/h3>\n\n

Dogs compete in stagnant markets with little share.<\/strong> They usually bring in little profit or even losses.<\/p>\n\n

The usual strategy is to withdraw them, sell them or reposition them in a niche where they are profitable.<\/p>\n\n

Sometimes they are kept because they round out the range or because they attract customers who then buy other products.<\/p>\n\n

How to build your company’s BCG matrix in 5 steps<\/h2>\n\n

You know the theory. Now let’s put it into practice.<\/p>\n\n

These five steps work both for a company with several business lines and for a small business with a small catalog.<\/p>\n\n

Step 1: choose what you’re going to analyze<\/h3>\n\n

Decide whether you’re going to compare products, product lines or business units.<\/p>\n\n

Don’t mix levels: a single product and an entire division can’t be compared in the same matrix.<\/p>\n\n

Step 2: calculate the growth of each market<\/h3>\n\n

Find out how much each product’s market has grown over the last year.<\/p>\n\n

You can use industry reports, competitor benchmarking<\/a> or your own demand analysis<\/a> if the market is small.<\/p>\n\n

Step 3: calculate relative market share<\/h3>\n\n

Divide your share by that of your largest competitor.<\/p>\n\n

If you sell \u20ac200,000 and the leader sells \u20ac400,000, your relative share is 0.5. If you’re the leader, divide your share by that of the runner-up.<\/p>\n\n

Step 4: place each product on the matrix<\/h3>\n\n

Draw the two axes and position each product.<\/p>\n\n

A useful trick is to represent it with a circle whose size reflects its revenue. That way you can see at a glance where your money is.<\/p>\n\n

Step 5: decide on a strategy for each one<\/h3>\n\n

With the matrix in front of you, define what you’ll do with each product and add it to your marketing plan<\/a>.<\/p>\n\n

Review it at least once a year, because products move between quadrants.<\/p>\n\n

Template to copy: your BCG matrix in a table.<\/strong> Here’s a table for you to fill in with your products:<\/p>\n\n

Product<\/th>Market growth (%)<\/th>Your share<\/th>Leader’s share<\/th>Relative share<\/th>Quadrant<\/th>What you’ll do<\/th><\/tr><\/thead>
Product A<\/td><\/td><\/td><\/td><\/td><\/td><\/td><\/tr>
Product B<\/td><\/td><\/td><\/td><\/td><\/td><\/td><\/tr>
Product C<\/td><\/td><\/td><\/td><\/td><\/td><\/td><\/tr>
Product D<\/td><\/td><\/td><\/td><\/td><\/td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n

BCG matrix examples<\/h2>\n\n

Seeing the matrix applied to a real case helps you understand it.<\/p>\n\n

Let’s look at two fictional examples, one of a large company and one of a small business.<\/p>\n\n

Example 1: a beverage company<\/h3>\n\n

Imagine a beverage company with four products. Its classic soft drink leads a mature market: it’s the cash cow.<\/p>\n\n

Its sports drink leads a market that grows every year: it’s the star.<\/p>\n\n

It recently launched<\/a> a flavored sparkling water in a booming market, but it still sells little compared with other brands: it’s a question mark.<\/p>\n\n

And it keeps a juice that barely sells in a market that is stagnating: it’s a dog.<\/p>\n\n

With the matrix, the decision practically makes itself. The money from the classic soft drink funds the sports drink and the bet on sparkling water.<\/strong> The juice is reviewed to either withdraw it or take it to a specific niche.<\/p>\n\n

Example 2: an online natural cosmetics store<\/h3>\n\n

Now imagine a small online natural cosmetics store with a very well-defined target<\/a>. Its BCG matrix could look like this:<\/p>\n\n

Product<\/th>Quadrant<\/th>Why<\/th>Decision<\/th><\/tr><\/thead>
Moisturizing cream<\/td>Cash cow<\/td>The best seller, in a stable market<\/td>Maintain it and look after its buyers<\/td><\/tr>
Vitamin C serum<\/td>Star<\/td>Sells a lot and the market is growing<\/td>Invest in content and advertising<\/td><\/tr>
Mineral sunscreen<\/td>Question mark<\/td>Booming market, but sells little<\/td>Test it for a quarter and decide<\/td><\/tr>
Handmade soap<\/td>Dog<\/td>Sells little and the market isn’t growing<\/td>Use it as a gift with large orders<\/td><\/tr><\/tbody><\/table><\/figure>\n\n

Look at the soap. A dog isn’t always withdrawn:<\/strong> in this case it becomes an incentive that helps sell the other products.<\/p>\n\n

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Look after your cash cows and test your question marks<\/strong><\/p>\n\n\n\n

Send each group of customers the email that’s right for them: up to 80,000 emails a month for free with Mailrelay.<\/p>\n\n\n\n

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Strategies for each quadrant<\/h2>\n\n

The BCG matrix doesn’t just describe where each product stands. It also suggests what to do with it.<\/p>\n\n

These are the four classic strategies:<\/p>\n\n