portfolio planning matrix



Business portfolio analysis technique used by large firms with decentralized profit centers called Strategic Business Units (SBU). The firm locates the position of each SBU on a four cell (quadrant) table formed by making a cross with four equal sides, each cell having a specific name and description based on its market share and type of market: (1) The lower left cell (labeled 'cash cows') contains SBUs that generate more cash than they consume because of their dominant shares of slow-growth markets. (2) The lower left cell (labeled 'stars') contains SBUs that may not generate a cash surplus but are likely to become cash cows because of their high shares of high-growth markets.
(3) The upper right cell (labeled 'question marks') contains SBUs that consume large amounts of cash to remain viable because of their low shares of high-growth markets. (4) The lower right cell (labeled 'dogs') contains SBUs that may generate enough cash to keep on existing, but hold no promise of ever becoming winners because of their low shares of low-growth markets. Developed in 1970s by the consulting firm Boston Consulting Group (BCG), the purpose of this analysis is to identify which SBUs to invest into, which to sell off, and which to shut down. Called also growth share matrix.


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