Diagnose & Map method guide
Growth-Share Matrix
The Growth-Share Matrix compares portfolio units by market growth and relative market share.
Beginner-friendly guide · 4 min read
What Growth-Share Matrix does
The Growth-Share Matrix compares portfolio units by market growth and relative market share.
The Growth-Share Matrix compares parts of a portfolio using market growth and relative market share. It was designed to support discussion about investment and cash allocation across business units or product-market groups.
The familiar quadrant names are prompts, not instructions. A useful review adds market definition, economics, strategic fit, uncertainty and relationships between portfolio items before deciding what to fund or stop.
BCG developed the matrix as a portfolio-allocation aid. The quadrants are prompts, not automatic prescriptions, and should be supplemented by strategic fit, economics, uncertainty and interdependencies.[1]
Bubble size can represent revenue, investment or another consistent measure. Quadrants begin the discussion rather than ending it.
Market growth: low to high
Relative market share: low to high
InnovationFlow explanatory schematic, synthesised from the method sources[1].
Understand the method
The parts in plain language
Market growth
Growth is a proxy for opportunity and investment demand. Define the market and period consistently so units can be compared.[1]
Illustrative example
A service growing at 18 per cent in a narrow niche may not be comparable with a mature global equipment market.
Relative market share
Relative share compares the unit with the largest relevant competitor, rather than reporting share in isolation. It is used as a rough indication of competitive position.[1]
Illustrative example
A unit with 20 per cent share has a relative share of 0.5 if the leader has 40 per cent.
Portfolio role
Consider whether a unit should receive investment, generate cash, be tested, repositioned or exited. Add strategic fit and dependencies before acting.[1]
Illustrative example
A low-share component may remain essential because it enables a profitable service offer.
When to use it
- When leaders need a first portfolio-level view of allocation tension.
- When product-market groups can be compared on a consistent basis.
A practical workflow
- 1
Define comparable portfolio units and market boundaries.
- 2
Collect defensible growth, share and weighting estimates.
- 3
Place the units and inspect portfolio balance.
- 4
Add strategic context before turning quadrant positions into actions.
Fictional worked example
Example: an industrial portfolio
This example is illustrative rather than a reported case. A supplier compares four product-market groups before its annual investment review.
Observation:High growth, but the company trails the market leader.
Implication:Decide whether a credible route to stronger share justifies investment.
Observation:High relative share in a slow-growth market.
Implication:Protect cash generation and selectively modernise.
Observation:Low share and declining demand.
Implication:Check customer and service dependencies before exit.
From analysis to decision
How to interpret the result
- 1Test the market boundaries and source data.
- 2Use the matrix alongside profitability, strategic fit and interdependency evidence.
- 3Record the investment logic rather than automatically applying quadrant labels.
The interpretation guidance is an InnovationFlow synthesis of[1].
What a useful output looks like
Common pitfalls
- Weak market definitions make the positions misleading.
- Do not use quadrant labels as a substitute for investment analysis.
References and method basis
This guide synthesises the named sources into practical questions for strategy and innovation work. It does not claim that using a tool by itself produces a successful decision.