BCG Matrix- How To Use, Insights and Free Templates

 

The BCG Matrix was initially sketched by Alan Zakon, a senior executive at BCG, and was later refined by Bruce Henderson, the founder of BCG, in his 1970 essay The Product Portfolio.

The BCG Matrix gained widespread use during the 1970s and was adopted by many Fortune 500 companies to manage diversification.

The BCG Matrix is still widely used today, although modern business dynamics have introduced new complexities that the traditional matrix did not fully account for​.

What is the BCG Matrix?

The BCG Matrix, also known as the Growth-Share Matrix, is a strategic framework developed by the Boston Consulting Group in 1970.

It helps firms evaluate their product portfolios by categorising products into four quadrants based on market growth rate and relative market share.

The matrix offers guidance on where firms should invest, divest, or maintain, and how they can best allocate resources across their product lines.

A Guide to the BCG Matrix

Market Growth

Traditional View:
The market growth rate refers to how attractive a market is in terms of expansion opportunities.

High-growth markets offer potential for revenue growth, while low-growth markets often represent maturity or saturation.

Traditionally, companies invested heavily in high-growth markets and maintained profitability with minimal investment in low-growth markets​.

Contemporary View:
In today’s business landscape, high-growth markets are more volatile and susceptible to disruption.

Rapid technological shifts and shorter product lifecycles often complicate long-term investment strategies.

For digital sectors, growth cycles are shorter, and companies must continuously adapt to remain competitive.

Key considerations:

• Volatility: High-growth markets are more vulnerable to economic fluctuations and technological advancements.
• Short product lifecycles: Digital products often experience faster saturation.
• Disruptive technologies: Technological innovations can rapidly change the market landscape​

Market Share

Traditional View:
Relative market share measures a product’s competitive strength compared to its largest rival.

Higher market share traditionally correlates with competitive advantages like economies of scale and increased profitability.

Products with low market share typically require substantial investment to become competitive​.

Contemporary View:
In today’s service-based and digital sectors, market share is not always the best measure of success.

For example, network effects, customer retention, and recurring revenue models often hold more importance than traditional market dominance.

Smaller, agile organisations can outcompete larger players by focusing on customer experience and innovation.

Key considerations:

• Network effects: In digital industries, user engagement and network growth often outweigh traditional market share.
• Scalability: Digital products can achieve rapid growth without high market share.
• Recurring revenue: Subscription business models focus on customer retention rather than market dominance​

The Four Sections of the BCG Matrix

BCG Matrix: Cash Cows (High Market Share, Low Growth)

Traditional View:
Cash Cows are products with high market share in low-growth or mature markets. These products generate reliable cash flow with minimal investment, as competition is limited. Firms often use profits from Cash Cows to fund investments in Stars or Question Marks​.

Contemporary Insights:
While Cash Cows continue to be valuable for maintaining financial stability, firms today also use them to drive innovation and diversify product offerings.

Markets evolve and so firms need to regularly reassess their relevance and explore incremental improvements or new customer segments.

Strategic Decisions:

• Maximise profitability: Focus on cost-efficiency to sustain cash flow.
• Invest in innovation: Use steady cash flow to fund innovation or enter adjacent markets.
• Diversify product lines: Extend product offerings to maintain customer interest​.

Example: Procter & Gamble’s Pampers brand generates significant cash flow, allowing the company to invest in developing new products​.

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BCG Matrix: Dogs (Low Market Share, Low Growth)

Traditional View:
Dogs are products with low market share and limited growth potential. These products often underperform financially, generating little to no profit. Traditionally, companies divested Dogs to redirect resources to more promising ventures​.

Financial Perspective:
From a financial standpoint, Dogs contribute minimally to revenue and may generate losses. Maintaining Dogs ties up capital and resources that could be better deployed elsewhere.

Companies that divest Dogs can improve profitability by reducing overhead costs and reallocating resources to higher-growth areas​.

Contemporary Insights:
Some Dogs can still offer strategic value, especially in niche markets. These products might provide customer insights, create synergies with other units, or generate steady, if modest, revenue. Firms should weigh up these benefits against the financial strain these products impose.

Strategic Decisions:

• Divest or exit: Most Dogs should be divested to free up resources for more promising products.
• Reposition for niche markets: Dogs may succeed in smaller, specialised markets with less competition.
• Reduce costs: Implement cost-cutting measures to minimise the financial burden​.

Example: Apple’s iPad is now considered a Dog, yet Apple continues to produce it for a loyal customer base​.

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BCG Matrix: Question Marks (Low Market Share, High Growth)

Traditional View:
Question Marks are products with low market share in high-growth markets. They require substantial investment to increase market share, with the potential to become Stars. However, if they fail to gain traction, they risk becoming Dogs​(Boston Consulting Group…).

Contemporary Insights:
In the digital economy, Question Marks face more risk due to rapid changes in consumer preferences and technology.

Firms can employ agile methodologies to test the viability of a product before fully committing resources which reduces the risk of over investing in the early stages of development.

Strategic Decisions:

• Invest selectively: Carefully assess potential before committing significant resources to growing market share.
• Test and iterate: Use agile approaches to validate market demand.
• Divest early: Exit the market if growth prospects are weak​(Understanding the BCG G…)​(Boston Consulting Group…).

Example: Apple TV remains a Question Mark, with Apple investing heavily in content while competing against dominant players like Netflix​(What Is the Growth Shar…).

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BCG Matrix: Stars (High Market Share, High Growth)

Traditional View:
Stars are products with high market share in high-growth markets. These products often require substantial investment to maintain their leadership positions but have the highest potential for growth. Stars are key drivers of future revenue and, as the market matures, often transition into Cash Cows​(Boston Consulting Group…).

Contemporary Insights:
In tech-driven markets, Stars face constant competition and shorter product life cycles. Companies must continuously innovate to maintain their market leadership. Agility and a deep understanding of consumer trends are essential to maintaining a Star’s status.

Strategic Decisions:

• Sustain high investment: Continue investing in growth to maintain leadership.
• Explore integration opportunities: Use vertical or horizontal integration to strengthen market position.
• Prepare for market maturation: Plan for the product’s transition into a Cash Cow as the market matures​.

Example: The iPhone remains Apple’s Star, commanding high market share and driving significant revenue, while Apple invests in R&D to maintain its competitive edge​.

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BCG Matrix Example

The BCG Model is based on products rather than services, however, it does apply to both. You could use this if reviewing a range of products, especially before starting to develop new products.

Looking at the British retailer, Marks & Spencer, they have a wide range of products and many different lines. We can identify every element of the BCG matrix across their ranges:

• Stars

Example: Lingerie. M&S was known as the place for ladies underwear at a time when choice was limited. In a multi-channel environment, M&S lingerie is still the UK’s market leader with high growth and high market share.

• Question Marks/Problem Child

Example: Food. For years M&S refused to consider food and today has over 400 Simply Food stores across the UK. Whilst not a major supermarket, M&S Simply Food has a following which demonstrates high growth and low market share.

• Cash Cows

Example: Classic range. Low growth and high market share, the M&S Classic range has strong supporters.

• Dogs

Example: Autograph range. A premium-priced range of men’s and women’s clothing, with low market share and low growth. Although placed in the dog category, the premium pricing means that it makes a financial contribution to the company.

Conclusion: Strategic Importance of the BCG Matrix

You can also apply the BCG model to areas other than your product strategy.

For example, I developed this matrix as an example of how a brand might evaluate its investment in various marketing channels.

The medium is different, but the strategy remains the same –  milk the cows, don’t waste money on the dogs, invest in the stars and give the question marks some experimental funds to see if they can become stars.

Whether you’re strategising for growth or assessing performance, these ready-to-use templates will help you visualise your company’s market position and make informed decisions.

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Product Management Tools: What Should Your Product Stack Include?

 

When talking about tools for product managers, we’re usually referring to the standard few that most product managers use every day. These product management tools generally include product analytics software, development tracking tools, and roadmapping software.

But a product manager’s job involves a lot more than gather product insight, tracking the backlog, and reviewing the product roadmap. Whether you’re a new product manager or a seasoned PM just wanting to make sure you’re not missing a key component of your role because you’re lacking the proper tool—the following is a list of product management tools to help you excel in your role.

12 Product Management Tools to Have in Your Product Stack

1. User tracking and analysis tools (such as Pendo and Amplitude)

These tools can be invaluable sources of intelligence and insight into how your software’s users or your website’s visitors are actually engaging with your product and your content.

Whereas customer surveys or interviews — which are valuable tools in their own right — will tell you only what your customers say and think product analytics platforms capture and help you analyze what those customers actually do.

If your company sells software or just maintains a lot of content on a website, deploying a service like Pendo or Amplitude can uncover important realities about what resonates with your users, and what doesn’t.

2. Roadmapping software (such as ProductPlan)

Roadmapping software is a must-have item on any list of product management tools. Using any non-native roadmap application to draft and maintain your product roadmap (such as spreadsheets or slide decks) will create far more work, be far less flexible and easy to share, and more prone to version-control issues that can slow your product’s progress. This is exactly why we built ProductPlan.

ProductPlan makes it easy for product teams to build and collaborate on product roadmaps. A visual, interactive roadmap is much more effective for communicating product strategy and helps align your team around your product vision.

3. Customer survey tools (such as SurveyMonkey or Typeform)

What’s great about web-based survey tools like SurveyMonkey or Typeform is that they have so many types of pre-formatted questions that, whether you want to offer multiple-choice questions, drop-down lists, or just open comment fields, you can put together a survey in minutes.

You can then send the survey out to your customers and easily track and analyze the results.

For gathering quick answers to important user questions, these tools are extremely helpful. But beware: Like email, online survey tools are so easy, convenient, and inexpensive that it can be tempting to overuse them. Use your surveys sparingly, so as not to upset your user base.

For gathering quick answers to important user questions, these tools are extremely helpful. But beware: Like email, online survey tools are so easy, convenient, and inexpensive that it can be tempting to overuse them. Use your surveys sparingly, so as not to upset your user base.

4. Recording apps for customer interviews (such as GoToMeeting or Zoom)

When you speak on the phone with customers, even if you’re just calling to answer a question, it’s always a great idea to record the call. Using a tool such as GoToMeeting or Zoom makes it easy to record those conversations and reference them later. You never know when a customer will offer valuable insight, ask a question you realize a lot of other users will have, or just share with you a novel why they’re using your product that you might not have otherwise thought of.

5. Industry analyst accounts (like Gartner or Sirius Decisions)

Here’s a tool you probably wouldn’t immediately think of as part of the product management tool stack — but depending on your industry and target customer, you might want to consider it.

Having access to the collective industry research and the latest thinking of the analysts covering your space can be extremely beneficial in terms of guiding your strategic thinking and helping you determine where your market is headed. The statistics and reports these research firms (such as Gartner or Sirius Decisions) output can give you just the types of data you need to prioritize and earn stakeholder buy-in for specific themes and features on your product roadmap.

Of course, this will be among the most expensive product management tool on this list, so you might need to use your powers of persuasion (which you no doubt have as a product manager) to convince your management team of its value.

6. Team messaging tools (such as Slack or Confluence)

When your product development, or any complex and cross-functional initiative, gets underway, you will want an easy and immediate means of communicating — as well as maintaining an ongoing record of all communications related to the initiative.

Thankfully, there are many simple, cloud-based tools that allow for just this type of easy and centralized team communication. Slack and Atlassian’s Confluence are a few that come to mind.

7. Presentation software (like PowerPoint or Keynote)

We often point out how inefficient presentation tools are for roadmaps. But that doesn’t mean that PowerPoint or Keynote shouldn’t have a prominent slot in your product management toolkit.

Presentation decks can be invaluable for communicating your high-level strategies, visions, and plans across your organization and to external audiences like customers.

Vision decks, for example, can be a powerful way of communicating your product’s vision to a group of executive stakeholders and earning their buy-in. Presentations can also be a highly effective way of conducting sales training or educating industry analysts about your product.

8. Project management tools (such as Jira, Pivotal Tracker, or Trello)

Like the team messaging tools we listed above, today’s project management applications are much more robust and provide a simplified means of tracking and documenting details.

Using a web app such as Trello, for example, you can track and share various items with relevant team members by grouping these items into easy-to-view Boards — such as “Sales Collateral in Progress” — and then creating individual Cards below, such as “Product Data Sheets” or “Case Studies.” These cards can easily be dragged and dropped under different Boards — say, from “In Progress” to “Under Review.”

Other popular project management tools include Microsoft Project, which teams typically arrange in Gantt chart format, and Jira, which is often configured as a less visual issue-tracking tool. And tools like Pivotal Tracker will help you to execute on your roadmap and keep your backlog organized.

9. Feature flagging software (such as Split.io or LaunchDarkly)

Feature flags give product teams an easy way to “turn on and off” specific features once code has been deployed to production. This comes in handy in a number of scenarios: coordinating a big feature launch, A/B testing, rolling back a new problematic feature.

Tools such as Split.io and LaunchDarkly empower product teams to manage feature flags and get the most out of their usage.

10. Session replay and heatmap tools (such as FullStory or Hotjar)

As a product manager, you spend a lot of time trying to dig into the minds of your customers and unearth exactly what the experience of using your product is like for them. With tools like FullStory and Hotjar, you can get insight into user behavior like never before.

Heatmap software helps you understand exactly what users on your site care about by visually representing their on-site behavior. This insight can be extremely valuable as supplemental data for your product team. A heatmap in conjunction with a number of session replays and a few customer interviews will give you plenty of data to make an informed product decision.

11. Flowcharting tools (such as Visio)

Although not all product managers use flowchart and diagram applications, the affordability and ease of use of these tools make them a great way of performing a step that many PMs overlook but shouldn’t — customer journey mapping.

Creating a customer journey map is helpful in giving you and your organization a clearer view of your customer’s full experience with your company. When created properly, a journey map will show all of the touchpoints an individual has with your organization from the first visit to your website (or the first call from one of your sales reps) through purchasing and using your product.

Journey maps can also focus specifically on the full experience of using your product — say, from the first visit to the site, through completing an online form, through any contacts the user has with your sales reps or other staff, through downloading and logging in to your tool.

Flowcharting and diagramming tools — like Microsoft Visio and OmniGraffle — can be helpful in mapping out any specific aspects of a user’s workflow or experience with your product. And because they offer a visual view of that workflow or experience — as opposed to merely a list of steps your customer will take — the flowcharts you output from these tools can then help you uncover insights into how to strategically prioritize your product roadmap.

12. Idea-capture and collaboration tools (like Evernote and Google Drive)

Finally, don’t forget the business productivity tools to capture ideas, review and share notes from meetings, and organize your insights into cohesive plans to earn stakeholder support.

Here we’re thinking about idea-capturing tools like Evernote, cloud-based collaboration apps like Google Drive, Dropbox — and even paper and pen because sometimes inspiration strikes when your smartphone is across the room!

Get a Budget for Your Product Management Tools

Requesting budgets for a tool is still a relatively rare occurrence for product teams, who traditionally haven’t had any dedicated budget and rarely ask for anything financial other than approving travel expenses or a new laptop. So, how do you successfully broach this subject with the executives holding the purse strings?

1. Make assumptions

Paint a picture of how life will be better once you have this tool because you’re either more productive, more nimble, your customers are happier, you’re saving the company money or you’re improving time to market, you can begin trying to quantify those benefits.

For example, having a requirements management tool will save the team 15 hours per week and reduce the likelihood that customer requests will fall through the cracks, which will reduce the average turnaround time from customer feedback to deployed feature by one sprint.

2. Strength in numbers

While a tool that only helps product management is still valuable, a much stronger case can be made when the tool will benefit other groups in the organization. This could be via direct usage—meaning that not only will product management use this tool but it will also be utilized by customer support or engineering—or as an indirect benefit where the output of the tool will be consumed by another group and make them more efficient as well. In addition to benefitting more than just the product management team, it also gives you another executive in your corner when it’s time to ask for money.

3. Acknowledge the alternatives

In most cases, there are multiple vendors offering specialized software solutions that address your needs. Even if you have already settled on a particular vendor, do your homework and include the other options as part of your pitch.

You can highlight why the solution you’re sweet on is superior, whether it’s the features or the cost, and potentially have a fallback plan if there’s a cheaper, inferior choice you could live with if you can’t get the full budget you were looking for.

4. Try the free-trial

If the tool you want has a free trial, dive in and start using the product before you even broach the budget subject with the powers that be. Not only will you be able to confirm that it’s the tool you want, but you can also collect more data to strengthen the business case when the trial is ready to expire, and you can demonstrate exactly how your team is using it.

5. Overcome the uncomfortable ask

Product teams aren’t used to requesting a budget for tools, but that doesn’t mean the team doesn’t deserve them. High performing organizations need tools and processes that support their growth and expanding portfolio, so there’s no shame in requesting the budget required to equip your team with tools that can truly make a difference. Even if the funds aren’t available immediately, you can at least start the conversation to carve out a dedicated product management tool budget for the next planning round to get them in the future.

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Tactics for Managing Change

 

Managing change in an organization is crucial for encouraging new growth and instilling confidence in employees. Therefore, managers must provide leadership and inspire employees to make changes themselves.

After observing changes in numerous industries, I created an 11-item checklist for managers to use to manage and promote change.

1. Be a Change Agent

Embrace change instead of simply letting it happen. Become involved, and be an agent of it. Work hard to realign the way you think about it. Typically, when organizations experience change, there are gaps and spaces – organizational uncertainty – about things like ill-defined roles.

2. Utilize the Empowerment

Many times, the best way to be a change agent is to utilize the empowerment you have been given and do a power grab. If there are things to accomplish, just do it! Don’t wait until deciding if it is the organization’s responsibility or yours. If it’s a gap and needs to be filled, then fill the gap.

3. Focus on Short-Range Objectives

When you are trying to work on change, instead of looking at the big vision of where you want to go, create a series of short-range objectives. It is good for you, the manager, as well as the organization that reports to you.

4. Get Resistance Out in the Open

As you manage the changes, understand any resistance that is out there. In other words, if you are proposing something different, make sure to:

• Propose it,
• Get it out there, and
• Figure out why there is resistance to it.

That way, you can understand how it is going to work. In fact, you can couch it like this, “Hey, we’re going to be agile. Let’s perform an experiment. You have these reasons why it won’t work, but we want to try to move in this direction. Let’s do this for x period of time and see if those concerns come up. Then, we can adjust.”

5. Lead by Being a Motivator

If you are a line manager and trying to be a change agent, encourage and motivate people to be willing to experiment, be agile, and be leaders. Leaders create followers. That is a crucial part of the process as is motivation.

6. Encourage Initiative

It is important to realize that all the ideas cannot be yours as the manager. Encourage the initiative from people reporting to you. If you can ultimately get people motivated and following you, then have them help you establish short-range objectives. Get them to find the power grabs out there and be their own change agent. The best thing a manager can do is to lead a group of fellow change agents. 

7. Create a Supportive Work Environment

During this time of change, people will be more stressed than not. For example, they may be thinking … Does this change mean that my job is going to change? Will I still be needed? I won’t be as valuable. The people I work with might not be here because of the reorganization.

Those are all the thoughts going through people’s minds when they are in the middle of a major change. Create the most supportive work environment that you can so that people have a chance to feel comfortable and have a safe space. They need to know that there will be good communication throughout the process.

8. Pass Out More Psychological Paychecks

Because of all the stress, you must provide more psychological paychecks. In other words, subconsciously they are thinking, “Is my job going away or changing? What’s going to happen to the people around me?”

Before they put those thoughts into words, pay them the support they need by saying, “Wow, what you’re doing is really valuable. I’m sure glad we have you doing that. I can’t imagine what we would do if we didn’t have you.”

Little encouragements like that go a long way. Before people can figure out the words to describe the stress they are feeling, they already have reinforcement. They think to themselves, “Hey, wait a minute. My boss just told me how this couldn’t be done by anyone else but me. Wow! That’s really cool.” Once that individual is comfortable, they can help the other people around them to accept the change. That is an excellent way for managers to create change agents within their organization. 

9. Increase Communication

What I have just talked about has really increased communication, which is a critical part of a supportive environment. But another crucial element is to ensure that people communicate with each other effectively. 

10. Reduce the Level of Job Stress

Do whatever you can to reduce the level of job stress during times of change. This is not the time to do 10% more with 10% less time and resources. This phase requires extra space for people to maneuver. Provide opportunities for them to think about things – how to be a change agent and what are ways to be able to do that.

11. Proactively Encourage Risk-Taking

Do whatever you can do to make employees feel better so that they are comfortable with change. Once this occurs, the next step is to encourage team members throughout your organization to proactively take on risk.

Sliwa Leads by Example

When I was at Embry-Riddle Aeronautical University as their new President, I was concerned about trying to create change and to encourage the faculty members and managers to follow suit.

I gave a speech to about 1,500 people and talked about how it was important to have a model to reduce risk aversion because many things are broken and need fixing. One reason that there was little change was that people were afraid of making mistakes. It was a very control-oriented organization, partially because of the extensive military influence. I tried to send the message that we must reduce the risk of making mistakes. My main point was, “Don’t be afraid of making mistakes!”

I encouraged people to:

• Not be afraid of making mistakes.
• Identify them.
• Correct them.
• Avoid them in the future.
• Learn from the experience.

Early on, I made what many of the faculty viewed as a major mistake. I appointed a dean who they did not feel comfortable with, nor did they approve of the process I used. I had consulted numerous people about the position, talked it out, found out what I required, and then made a selection.

They were not happy with that. After a couple of days of people visiting me and explaining how upset they were, I said, “Okay. I made a mistake and will correct it. For this particular dean position, I will list my requirements and ask the faculty to conduct a search and provide three candidates. From there, I will make the final choice.” They liked that idea and moved forward. Even though we ended up with a candidate who did not satisfy all my requirements, it was a joint project. 

About six months later when I had built some rapport, several faculty members said to me, “Yes, Sliwa leads by example. He told us to go out there and make mistakes. And by golly, that’s what he did. Right from the beginning, he made a huge blunder.” I had to chuckle about that because it is a fun faculty interpretation of the situation. It ended up being a little endearing. 

About five to eight years after I left Embry-Riddle, some faculty members were talking to faculty at another institution. They said some kind things about my tenure and also brought up the fact that I encouraged taking risks and making mistakes. I had also made plenty of errors in the beginning, such as the dean appointment, but I was willing to correct them. At the time, they were shocked that a President would listen and be willing to admit and correct his/her mistakes.

I was true to my principles. If you make a mistake, own it, correct it, and then avoid it in the future. That experience created endearment between the faculty and me.

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How to Measure Innovation

 

By Mark Malinoski & Gail Stout Perry

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