Established model
The growth–share matrix
Bruce D. Henderson, Boston Consulting Group · 1970
Also known as The BCG matrix, Stars, cash cows, question marks and dogs
Sort what the business owns by how fast its market is growing and how strong its position in it is, and fund each kind differently.
Its place in the frameworkBusiness Core›Business Assets
What it does
Four boxes, and the names have outlived the theory: strong positions in growing markets need investment, strong positions in slow markets pay for it, weak positions in growing markets are a bet, and weak positions in slow markets are a decision nobody has taken. Its real subject is cash — which parts of a portfolio generate it and which consume it.
- Reach for it when
- When a business has several products, brands or units and they are all being funded as though they were the same kind of thing.
- Where it stops
- Market share and market growth are crude proxies for a position’s value, and the boxes ignore how units support one another. Used literally it has closed businesses that were quietly holding something together.
Bruce D. Henderson, “The Product Portfolio”, Perspectives, Boston Consulting Group, 1970.
Why it sits at Business Assets
What the organisation owns and can put to work — premises, equipment, technology, intellectual property, capital. The things that remain when the people go home.
A model is only useful when you reach for it at the right moment. This one answers a question that arises here — so it is filed here, and nowhere else. These are the working areas it serves:
- Asset registerStandard asset management practice; the register is the control that makes utilisation and lifecycle work possible.
- Intellectual propertyIP management practice, and the accounting distinction between recognised intangibles and internally generated ones that never appear on the balance sheet.
- UtilisationAsset utilisation measurement, including overall equipment effectiveness where production assets are involved.
- LifecycleTotal cost of ownership and lifecycle costing, which consistently show purchase price to be a minority of the total.
What it touches elsewhere
Nothing in a business is decided on its own. A conclusion reached with this model at Business Assets lands in these other cores, whether or not anyone follows it there.
- Business CoreAssets are what core competencies are often built on, and what finance has to fund.
- Data CoreData is an asset, and one of the few that appreciates with use.
- Time CoreReplacement cycles and maintenance windows are timing decisions.
- Goal CoreA goal requiring capacity the asset base cannot provide is a capital decision in disguise.
Filed at the same place
These answer questions that arise at Business Assets too. Where they disagree with this one, the disagreement is the useful part.
- The resource-based viewLook at a company as a bundle of resources rather than a set of products, and advantage comes from what it holds.
Elsewhere in Business Core
- Tuckman’s stages of group development
- Belbin Team Roles
- Herzberg’s two-factor theory
- Jobs to be done
- The Kano model
- The value proposition canvas
- The business model canvas
- The Van Westendorp price sensitivity meter
- Value-based pricing
- Core competence
- VRIO
- The theory of constraints
- Lean thinking
- Co-opetition and the value net
- Transaction cost economics
- Stakeholder theory
- The power–interest grid
- DuPont analysis
- Break-even and cost–volume–profit analysis
- Unit economics
- The Kraljic Matrix
- The bullwhip effect
- The SCOR Model
- On-time in-full
- Overall equipment effectiveness
- Value stream mapping
- The three lines model
- ISO 31000 risk management
- Maslow’s hierarchy of needs
- Kotter’s eight-step change model
- Situational leadership
- The Lean Startup
- Design thinking
- Porter’s value chain
- The McKinsey 7S framework
- Six Sigma and DMAIC
These are other people’s models, named here so you can go to the source and use them properly. The Omnigoal is not affiliated with their authors and is not endorsed by them; nothing of theirs is reproduced here — no canvas, no diagram, no wording. Each is described in our own words, with the originator credited, because the framework is a place to put thinking, not a replacement for the people who did it. Model names and trademarks belong to their respective owners and are used here only to refer to the work itself.
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