BCG analysis is mainly used for Multi-Category/Multi Product companies. All categories and products together are said to be the part of Business Portfolio. It aims to evaluate each product, i.e., the goods and services o

BCG analysis aims to evaluate each product, i.e. the goods and services of the business in two dimensions which are as follow: Market growth Market share CASH COW Cash cows are products which have a high market share in a low growing market. As the business growth rate of market is low, cash cow gains the maximum advantage by generating maximum revenue due to its higher market share. Therefore, for any company, the cash cows is the category of products which require minimal investment but ensure higher returns. These higher returns raise the level of overall profitability of the firm because such excess revenue generation can be used in other businesses which carry products falling in the category of Stars, Dogs or Question marks. STAR The products or services falling in this category are best products/services in the product portfolio of any company. This is so because, for such category of products, both markets share as well as growth rate is high. Unlike cash cows, Stars cannot be complacent when they are top on because they can immediately be overtaken by another company which capitalizes on the market growth rate. However, if the strategies are successful, a Star can become a cash cow in the long run. QUESTION MARK Several times, a company might come up with an innovative product which immediately gains good growth rate. However, the market share of such a product is unknown. The product might lose customer interest and might not be bought anymore in which case it will not gain market share, the growth rate will go down and it will ultimately become a Dog. On the other hand, the product might increase customer interest and more and more people might buy the product thus making the product a high market share product. From here the product can move on to be a Cash Cow as it has lower competition and high market share. Thus, Question marks are products which may give high returns but at the same time may also flop and may have to be taken out of the market. This uncertainty gives the quadrant the name "Question Mark". The major problem associated with having Question marks is the amount of investment which it might need and whether the investment will give returns in the end or whether it will be completely wasted. DOG Relative Market Share = Your firm's market share (or revenues) ÷ Largest competitor's market share (or revenues) Products are classified as dogs when they have low market share and low growth rate. Thus, these products neither generate high amount of cash nor require higher investments. However, they are considered as negative profitability products mainly because the money already invested in the product can be used somewhere else. Thus, over here businesses have to take a decision whether they should divest these products or they can revamp them and thereby make them saleable again which will subsequently increase the market share of the product.