The growth share matrix was developed by the Boston Consulting Group with the purpose of helping organization distinguish between the different businesses they manage in terms of their priorities and the amount of resources to spend on them.
Though being commonly used, the scheme has some drawbacks. The most important point is that the analysis can never be carried out with a 100% accuracy, thereby there might be some misperceptions of a product’s or business’ potential, as it happened in the case of consumer electronics in the 1970s ("Growth share matrix", 2009).
Secondly, growth share matrix devotes too much attention to the market share; such situation may prevent a company from seeing larger opportunities ("Growth share matrix", 2009). Lastly, the usage of this scheme can dilute corporate ethos at a company, since it brings about rivalry among the marketers, responsible for particular product lines, and discourages the ones responsible for the products considered ‘dogs’ (Session 4).
On the example of Apple Inc. according to the growth share analysis, the products can be allocated as follows:
Stars: iPhones, iPads;
Cash cows: Mac PCs;
Question marks: Apple TV;
Dogs: iPods.
In the company’s portfolio cash cows are represented by Mac computers. This type of product still brings the company a considerable portion of revenue and takes large market share. Nevertheless, there’s no growth potential for this product and the company concentrates on the development of portable and mobile electronics that bear broad opportunities for growth and take a big market share.
References
Growth share matrix. (2009, September 11). The Economist. Retrieved from http://www.economist.com/node/14299055
Session 4. Introduction to marketing [Pdf]. (n. d.).
