TheBCG matrixa key tool to guide your strategic choices, offering a direct reading of the strengths and weaknesses of your product portfolio using factual criteria such as therelative market shareand the growth rate of the sector.
Here you will find a visual and concrete example, ready for use, designed to accompany managers, marketing managers or consultants to decisions that are quick and based on truly objective data (several consulting practitioners insist on this immediate strength).
The BCG matrix: concrete example and immediate response to research intent
Do you need an accessible example of a BCG matrix to understand its use? Here is a case inspired by the drone industry, presented visually and operationally from the beginning, as the most effective practical guides.
Here we take the case of a company offering 4 types of drones: Drone A, Drone B, Drone C, Drone D. Their performance is evaluated in two ways:
- Relative market share– obtained by dividing the market share of each drone by that of its main rival
- Market growth rate: measures the dynamism of the segment, whether it targets professionals or individuals
This is how the product portfolio is articulated:
| Product | Market share | Competitor share | Ratio | CA (€) | Market growth | Quadrant BCG |
|---|---|---|---|---|---|---|
| Drone A | 15% | 12% | 1,25 | 400 | 15% | Vedette (Star) |
| Drone B | 7% | 16% | 0,44 | 80 | 20% | Dilemma (Question Mark) |
| Drone C | 12% | 8% | 1,5 | 120 | 15% | Vedette (Star) |
| Drone D | 4% | 14% | 0,28 | 100 | 15% | Dead weight (Dog) |
With a simple glance, one can easily spot the stars that boost growth, the dilemmas to arbitrate, and the least promising segments.
This is the major utility of the BCG matrix: allowing quick arbitrations based on solid indicators.
Many policy makers also refer to the clarity that this tool brings to sometimes very lively product committees.
What is the BCG matrix?
Designed in the 1970s by the Boston Consulting Group, the BCG matrix eventually became an important part of the analytical tools for companies looking for clear control.
Its mission: to map activities or products in order to better guide investments, abandonments or differentiation axes.
Its immediately understandable side reassures many managers.
It is not uncommon for the matrix to be the first scheme chosen to present the situation of a portfolio.
Some consultants even report that this scheme is almost a necessary transition...
A strong methodological tool for all sectors
His strength? It is based on two quantifiable and legible criteria, relevant in the vast majority of sectors, from industry to the digital economy.
With each product recast or launch, it serves as a compass for marketing and strategic management to arbitrate rationally.
It is also regularly crossed with other matrices (such as SWOT or Ansoff) to reinforce analysis – a management trainer even mentioned that this complementarity has become a standard in most major groups.
How does the BCG matrix work? Principles and lines of analysis
The main interest of the BCG matrix lies in the intersection of two dimensions: market growth and relative market share.
Their association will highlight the strengths and weaknesses of the portfolio studied.
Some beginners could wrongly focus only on turnover, while the tool invites to consider the overall dynamics of the sector but also the competitive position.
Is that enough to drive a strategy? To see...
Decryption of key axes
To quickly locate each product or activity:
- Market growth rate:it illuminates the future attraction of the area. One segment to more than10%In general, distribution experts are very promising.
- Relative market share:the calculation (turnover or volume of the main competitor's C.A.) indicates the competitive position. A ratio> 1place the company in a leadership position.
We take our example: the Drone A, 15% against a competitor at 12%, generates a ratio of 1.25.
In concrete terms, this superiority anchors among leaders.
The 4 quadrants explained with concrete illustrations
The BCG matrix ranks each product in one of its four quadrants.
To illustrate the approach beyond theory, let us look at tangible figures and talking cases.
Vedettes (« Stars ») : the locomotive of the portfolio
These activities dominate a fast growing market (ratio > 1, marked growth).
Focusing on a star is ensuring the future, but while keeping in mind the sometimes intensive use of cash – a financial officer recently recalled the importance of this follow-up.
In our example, Drone A, with a ratio of1,25in a growing15%, must remain at the centre of investment priorities.
Actual case:
Outside the drone industry, consider Apple's iPhones or the Netflix library in the video on demand: their lead in dynamic markets makes them the most « Stars » emblematic.
Some users also mention that sometimes the cost of these positions is forgotten...
Milk cows (« Cash Cows ») : cash generators
In mature markets (low growth) but with widespread dominance, milk cows regularly finance the processing of other business activities.
Several professionals believe that the financial strength of CAC 40 groups is often based on these stable products.
The graph shows this: if the market for professional drones goes to2%However, Drone C maintained a ratio of more than 1 and would then turn into a milk cow crucial for global equilibrium.
Dilemmas (« Question Marks ») : potential or mirage ?
These segments always question the decision-maker: they operate in dynamic markets (>10% growth), but have a limited market share (ratio < 1).
Their potential remains uncertain (an investor regularly testifies to the dilemma between injection of resources or disengagement).
Drone B (ratio 0.44 in a20%) embodies this delicate choice: invest or let go to avoid burning cash?
Depending on the time or the economic situation, the position changes.
Dead weight (« Dogs ») : pay attention to waste!
We find ourselves here with segments showing both weak growth and weak competitive position.
Typically, Drone D (ratio of0,28on a market15%) cost more than it pays; it would be prudent to consider a measured exit.
Who has never seen brands keep too long ranges « dog » While a repositioning would probably have limited the losses?
Practical application of the matrix: steps, calculations and advice
Designing its own BCG matrix remains much more accessible than one might think.
Most guides recommend a methodical approach and use automation tools to facilitate the task.
Steps to Build Your Own BCG Matrix
Think of structuring your analyses in this way:
- Identify all the products or business units to study.
- Collect up-to-date figures on market shares and growth (for example, the private drone market has moved to+20%This year).
- Evaluate the relative market share for each reference, and check whether the result is greater than or less than 1.
- Give each product a position on the chart, taking into account the two basic axes.
- Identify their respective quadrants to guide resource arbitration.
Some practitioners prefer the use of Excel simulators or pre-set models to speed up the process (more than100 free templatesMoreover, they are offered on the Internet, which really makes it easier when you start, or when time is running out).
Frequently asked:
« Does the BCG matrix really apply to an SME? » The answer is positive – since three different products or segments can be prioritized.
The most decisive is the relevance and freshness of the data.
One SME official recently mentioned the positive impact of this tool in an internal reorganisation.
Downloading Resources and Related Tools
Today we find more150 free resourcesor models around portfolio management and BCG matrix (Excel, PDF, illustrated guides).
A real boost for those who start the exercise or who seek to go straight to the essential, especially if the delay is tight.
To optimize your analysis, there are also downloadable interactive simulators or FAQs, adapted to each step – whether to refine the initial diagnosis or to drive the regular portfolio update.
A strategy analyst frequently advises these tools to accompany the untrained teams.
FAQ & additional resources on the BCG matrix
A question about the calculation or method of using the matrix? There are a number of barriers that policy makers regularly face: precise calculation of relative market share, sector-specific adaptation, interactions with tools such as SWOT... Here are some quick leads:
How to calculate relative market share?
It is simply a matter of dividing your market share by that of your main competitor.
For example: if you hold15%and your main competitor12%, the relative market share will be1,25 (15 ÷ 12).
Some managers also create monitoring tables to update this ratio over the course of the year.
What concrete examples illustrate each quadrant?
We find various profiles according to the categories: Drone A corresponds to a « Star »Drone B to one « Dilemma », the iPhone is also a star, Netflix dominates its segment, while the classic laundry instead embodies the « milk cow » and some end-of-life consoles are classified as deadweights.
Perhaps you will recognize one of your products in these examples?
Is the tool suitable for my sector or for an SME?
Yes, as long as three categories or products are represented.
The simplicity and legibility of the model play a fundamental role in its adoption, particularly within agile organisations or SMEs/ETPs.
Several experiences highlight the flexibility of the matrix on different terrains.
What are the pitfalls to avoid?
Limiting to the current turnover or following its intuition can lead to bias.
It is always recommended that the matrix be built on evidence to avoid serious misjudgement.
It is also recommended to cross-check with tools such as the Ansoff or SWOT matrix to deepen its diagnosis.
Need to go straight to the essentials? A ready-to-use PDF guide and Excel template are available in line with the best practical materials shared by several consulting firms.
Bonus: Towards an enhanced strategic analysis?
The intelligent articulation of matrices (e.g. BCG and SWOT) provides a robust strategic roadmap, capable of integrating sudden market developments.
This methodological cross-section is now increasingly encouraged in training courses dedicated to digital transformation or supply management.