What is the purpose of the growth-share matrix?

The growth-share matrix, also known as the BCG matrix, serves to evaluate a company's strategic business units (SBUs) in relation to their market growth and market share. This tool helps businesses make informed decisions about resource allocation and strategic planning. It categorizes SBUs into four quadrants—Stars, Cash Cows, Question Marks, and Dogs—based on their market growth rate and relative market share. This visualization allows managers to prioritize investments and strategies according to the potential for high returns or the need to divest.

By assessing the position of each SBU within this framework, companies can better understand which units are performing well, which require more attention and resources, and which may need to be phased out. This focus on market growth and share directly ties into the core objective of the growth-share matrix, making it an essential strategic tool for effectively managing a diversified portfolio.