Strategy Formulation:

Business Portfolio

The BCG Growth-Share Matrix

Strategic Business Portfolio Analysis

By: Vadim Kotelnikov

Founder, Ten3 Business e-Coach Inspiration and Innovation Unlimited!

"You will either step forward into growth or you step back into safety." ~ Abraham Maslow

The BCG Growth-Share Matrix Business Portfolio The BCG Growth-Share Matrix - Boston Consulting Group, Strategy Formulation, Strategic Business Unit, SBU

Characteristics of Strategic Business Units (SBUs)

  1. It is a single business or collection of related businesses

  2. It has its own competitors

  3. It has a manager who is accountable for its operation

  4. It is an area that can be independently planned for within the organization



Business Portfolio

GE Multifactor Business Portfolio Matrix

Innovation Strategy

Venture Strategies

New Product Development

Strategic Management

Strategy Management

Strategies of Market Leaders

Sustainable Competitive Advantage

Business Strategies

What Is BCG Growth-Share Matrix

The Boston Consulting Group (BCG) developed a portfolio analysis tool that helps managers develop organizational strategy based on market share of businesses and the growth of markets in which businesses exist.

 2 Basic Business Growth Strategies

 Competitive Strategies: 2 Types

 3 Strategies of Market Leaders

Strategic Business Units (SBUs)


The first step in using the BCG Growth-Share Matrix is identifying the organization’s strategic business units (SBUs). A strategic business unit is a significant organization segment that is analyzed to develop organizational strategy aimed at generating future business or revenue. Exactly what constitutes an SBU varies from organization to organization. In larger organizations, an SBU could be a company division, a single product, or a complete product line. In smaller organizations, it might be the entire company.1 Although SBUs vary drastically in form, they have some common characteristics. All SBUs are a single business (or collection of businesses), have their own competitors and a manager accountable for operations, and can be independently planned for.

Categorizing SBUs

After SBUs have been identified for a particular organization, the next step is to categorize each SBU within one of the following four matrix quadrants:

Stars – SBUs that are “stars” have a high share of a high-growth market and typically need large amounts of cash to support their rapid and significant growth. Stars also generate large amount of cash for the organization and are usually segments in which management can make additional investments and earn attractive returns.

 Sustainable Competitive Advantage

 Surprise To Win: 3 Strategies

 Blue Ocean vs. Red Ocean Strategy

Cash Cows – SBUs that are cash cows have a large share of a market that is growing only slightly. These SBUs provide the organization with large amounts of cash, but since their market is not growing significantly, the cash is generally used to meet the financial demand of the organization in other areas, such as the expansion of a star SBU.

Question Marks – SBUs that are question marks have a small share of a high-growth market. They are dubbed “question marks” because it is uncertain whether management should invest more cash in them to gain a larger share of the market or deemphasize or eliminate them. Management will chose the first option when it believes it can turn the question mark into a star, and second when it thinks further investment would be fruitless.

Dogs – SBUs that are dogs have a relatively small share of a low-growth market. They may barely support themselves; in some cases, they actually drain off cash resources generated by other SBUs.



  1. Modern Management, Ninth Edition, Samuel C. Certo