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Key MBA Models by Dr. Julian Birkinshaw, Ken Mark

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21

The BCG growth-share matrix

Most firms operate in more than one line of business. In such multi-business firms, it can be challenging to figure out how they all fit together and where the priorities for future investment might be. The BCG ‘growth-share matrix’ is a simple model to help with this analysis.

When to use it

  • To describe the different lines of business within a multi-business firm.
  • To help you prioritise which businesses to invest in and which ones to sell.

Origins

In the post-war era, firms in the USA and Europe had grown in size dramatically. Conglomerate firms such as ITT, GE and Hanson had started to emerge – typically they had large numbers of unrelated business, all controlled using financial measures from the centre. ...

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