Product Portfolio Matrix

The Product Portfolio Matrix, also known as the BCG Matrix, is a strategic business tool used to evaluate a company's product lines or business units. It helps in identifying which products or units to invest in, develop, or discontinue based on market growth and market share.

At a very high level, the Product Portfolio Matrix is used in the context of business, marketing, strategy.

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What is the Product Portfolio Matrix?

A visual explanation is shown in the image above. The Product Portfolio Matrix can be described as a matrix with the following quadrants:

  1. Stars: High market growth and high market share; e.g., a leading smartphone model in a growing market.
  2. Question Marks: High market growth but low market share; e.g., a new tech gadget with potential but limited current market share.
  3. Cash Cows: Low market growth but high market share; e.g., a well-established household cleaning product.
  4. Dogs: Low market growth and low market share; e.g., an outdated software product in a declining market.

What is the purpose of the Product Portfolio Matrix?

The Product Portfolio Matrix, developed by the Boston Consulting Group (BCG), is a framework that helps organizations analyze their product lines or business units. The matrix is divided into four quadrants based on market growth rate and relative market share. Each quadrant represents a different strategic recommendation:

  • Stars: High market growth and high market share. These products or units are leaders in their market and require substantial investment to maintain their position and support further growth.
  • Question Marks: High market growth but low market share. These are potential opportunities that require significant investment to increase market share. The decision to invest or divest depends on the potential for growth and profitability.
  • Cash Cows: Low market growth but high market share. These products or units generate steady cash flow with minimal investment. They are typically used to fund other segments of the business.
  • Dogs: Low market growth and low market share. These products or units are often considered for divestiture or discontinuation as they do not generate significant profit and have limited growth potential.

The Product Portfolio Matrix helps businesses allocate resources effectively, prioritize investments, and develop strategies for growth and sustainability.


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What templates are related to Product Portfolio Matrix?

The following templates can also be categorized as business, marketing, strategy and are therefore related to Product Portfolio Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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