Hence anyone who is seeing this matrix can deduce easily that cash cow and stars are the two quadrants which are ideal for the company and question marks and dog are the two quadrants which a company should try to avoid due to the risks involved in both the scenarios.

The biggest advantage of the BCG matrix is that it very easy to understand and one does not need to have a master’s degree or qualification to understand this concept. In order to have a clear understanding of this concept, one should look at the advantages and disadvantages of BCG Matrix – BCG Matrix Advantages Easy to Understand Question marks is the third quadrant which represents those business units which are having lower market share in a rapidly growing market and it requires substantial investment on the part of the company, while the last quadrant is called dogs which represent those business units which have low market share and industry too is on the declining trend which leaves no scope for company to have good cash flows.

Stars is the first quadrant which represents those business units which have higher market share in a rapidly growing industry which results in higher cash inflow for the company, while cash cows is the second quadrant which represents those business units which have higher market share in stable industry resulting in higher cash inflow for the company without much of investment.

The four quadrants or scenarios of BCG matrix are called stars, cash cows, question marks, and dogs. BCG matrix has four types of scenarios with respect to the market share of the company, cash flow generation and growth rate of the industry in which the company is operating. Full form of BCG matrix is Boston Consulting Group Matrix. BCG matrix is the term used in the context of management. In case of English we all have read letters BCD and in case of management, all management students read the letters BCG.

Bcg matrix explained