I’d like to highlight a chart that doesn’t get too much attention: the Growth/Share chart. This chart examines two variables, relative market share and market growth. Highlighting product categories in relatively strong and weak market positions, it is a four-cell (2X2) matrix used to perform business portfolio analysis. The diameter of the circles is proportional to sales revenue, and it works by classifying products (or businesses) on the basis of their relative market share to their competitors or to the rate of growth in the market as a whole. The x axis is relative market share and is a reverse log. The Y axis is market growth.
The four quadrants in the matrix have been referred to as Dogs, Cash Cows, Question Marks, and Stars.
Market strategies will likely differ for each quadrant.
Dogs. These are products or business with a low market share in a low growth market.
Cash Cows. These are businesses or products with low-growth but with a relatively high market
Question Marks. Question marks are businesses or products with low market share but which operate in higher growth markets
Stars. These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income.
Here’s an example of a fictitious toy company’s Mekko Graphics Growth Share Chart.
Notice the two axes. The X axis measures relative market share or the proportion of the market that the toy firm has captured. It is the Firm’s Sales/Total Market Sales. The X axis is a reverse log. The Y axis is the market’s growth rate. The Bubble size is the percent of sales revenue for each product line divided by the total sales revenue.
