The 5 Charts that Changed Businesses: the Growth-Share Matrix

Posted on September 6, 2012

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People don’t usually think of charts as groundbreaking innovations.  But the visual aid of a chart often helps us draw valuable conclusions from otherwise unorganized data.  DaVinci Business Graphics continues our series on the 5 charts that changed the business world, as we take a look at the Growth-Share Matrix.    

 

The Growth-Share Matrix was created in 1968 by the Boston Consulting Group’s Bruce Henderson.  The matrix was developed to help corporations analyze their business units or product lines.  Recently, the usefulness of the chart has been called into question and it has even been excluded from some newer marketing textbooks.  But when it was initially released, the growth-share matrix offered some ground-breaking business insights.

To use the chart, analysts plot a scatter graph to rank the business units (or products) on the basis of their relative market shares and growth rates.  With the growth rate serving as the Y axis and the market share serving as the X axis, products fall into one of four categories: Stars, Cash Cows, Dogs, and Question Marks.


Using the Growth-Share Matrix, businesses are taught to invest in Stars, which have high market growth and a high market share.  They are taught to invest as little as possible in Cash Cows as they have a high market share but little market growth.  Dogs, most say, should be sold off because they have little growth and a small market share.  Question Marks must be analyzed carefully because they have the potential to become Stars, or Dogs.


The Growth-Share Matrix provides a useful way to organize product data to make better business decisions.  If your business needs help representing data using the visual simplicity of a chart, consult DaVinci Business Graphics.  We’ve been providing businesses with the custom business charts they need for over 25 years.  We print the highest quality business charts designed to your specifications.

Contact DaVinci Business Graphics today and discover how our charts can help you better manage your business

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Call Us at 1-949-679-7666

Image 1 via hbr.org, Image 2 via en.wikipedia.org, Image 3 via universalfunding.org, Image 4 via davincibg.com

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