Stars are found in the upper left quadrant of the matrix. Stars exhibit high growth and command high market share. The four cells of this matrix are designated stars, cash cows, question marks, and dogs. The horizontal axis of this matrix represents relative market share, while the vertical axis represents the market growth rate. The BCG matrix is divided into four quadrants and is based on two parameters – relative market share and the market growth rate. To calculate the relative market share of a product, divide its market share by the market share of the product’s largest competitor.To use the BCG matrix, it’s important that a company assess its products or business units based on certain parameters.
For example, it can help manufacturing companies gauge the market potential of their product portfolios and determine which products should be their focus and which should be discontinued. This matrix can be applied to many different types of businesses.
