Growth Share Matrix
The Growth Share Matrix is designed to bring in as much cash as possible. It helps the user decide on which business ventures will be of the most value, which should be considered, and which should be discarded.
At a very high level, the Growth Share Matrix is used in the context of marketing, business.
What is the Growth Share Matrix?
A visual explanation is shown in the image above. The Growth Share Matrix can be described as a matrix with the following quadrants:
- High Market Growth; Low Market Share: Opportunities that require analysis to decide whether or not they are worth pursuing.
- High Market Growth; High Market Share: Opportunities that may be beneficial; they require a large investment but may involve high returns.
- Low Market Growth; Low Market Share: Opportunities that are practically useless and should be refused; although they only require a small investment, they will generate a very small return.
- Low Market Growth; High Market Share: Opportunities that are extremely profitable and beneficial; they require only a small investment which generates high return rates.
What is the purpose of the Growth Share Matrix?
In a business, or practically any other enterprise, losing money could cause dangerous complications. Making shrewd, educated decisions before pursuing opportunities could help prevent an operation from failing.
Two extremely important factors should be taken into account when making these decisions:
- if the business is more successful than other businesses like itself, thus maintaining acceptable cash generation (Market share)
- if the market currently requires a high or low investment to see good return results, which impacts cash consumption (Market Growth).
These two factors play an important part in the success of a business/enterprise, and they are what make up the Growth Share Matrix.
The growth share matrix basically splits opportunities into four quadrants: those that require low cash investment and involve low cash returns (Quadrant 1), those that require high cash investment and involve high cash returns (Quadrant 2), those that require low cash investment and involve low cash returns (Quadrant 3), and those that require low cash investment and involve high cash returns (Quadrant 4).
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What templates are related to Growth Share Matrix?
The following templates are categorized as marketing, business and are therefore related to Growth Share Matrix: Effort Impact Matrix, Quadrant Analysis, Product/Market Matrix, Strategy Culture Matrix. You can browse them using the menu above.
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