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Key Question

Which industries or sectors should we be in?

Tool Description

The Growth Share Matrix is a simple matrix devised to visualise multiple investment alternatives. It helps you compare relative attractiveness of different growth vs share solutions. It requires an Excel sheet and the Bubble function in the Chart Menu.

Typical Process

  • Compile competitor or division market shares in their relevant market
  • Gather market growth rates for each industry or segment
  • Plot
  • Split chart in 4 quadrants: Dog; Question Mark; Star; and Cash Cows
  • Do not worry exceedingly about accuracy of positioning of a given data point in the matrix but focus rather on relative positioning

Tricks & Tips

  • Each quadrant of the matrix corresponds to a generic team, describing the strategic opportunities available to a company or division present there:
  • Bottom-left quadrant, “Dog”, small market share of a below par growth industry, little opportunity
  • Top-left “Question Mark”, small market share of an above par growth industry, good opportunity
  • Top-right, “Star”, big market share of above par growth industry, great opportunity
  • Bottom-right, “Cash Cow”, big market share at below part growth, superb position but little opportunity, time to milk!
  • Originally BCG had the x-axis with RMS (relative market share) and was plotted with leaders on the left rather than the right

 

 

 

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First Published: March 2020