A Strategic Guide The growth/share matrix is easy to comprehend. A person with none or limited experience in portfolio planning would be able to quickly understand its format and basic use. This is the other side of the coin when comparing it to a limitation in respect of the GE/McKinsey matrix, where the latter would be more difficult to explain and compile due to the extra elements involved. A basic (i.e. not too precise) growth/share matrix for an organisation may be constructed in little time provided sufficient data is readily available and there is a good understanding of how the organisation works. The other side of the coin in this respect is that competitors can also do the same. For example, Bank B can quickly construct a reasonably correct growth/share matrix of Bank A in order to study the latter’s portfolio composition and spot weak points in the portfolio. Such a scenario is not too unrealistic as Anon. (2002) describes a Japanese executive who was delighted that his competitors managed by the portfolio concept as he could almost predict that competitor’s businesses’ transformation into question marks or dogs (and subsequent divestment) through loss of market share. Another benefit of the growth/share matrix is that at a glance one can see a picture of the organisation’s total portfolio of question marks, stars, cash cows, and dogs. This picture is comprehensive enough to show the corporate distribution of resources, and to highlight those SBUs/products/services that merit particular attention. This attention may be in order to invest more resources so that an SBU/product/service improves its position, or gradually disinvest resources such as in the case of question marks or dogs. In the case of Bank A’s growth/share matrix a number of products and services are candidates for more management focus. From Bank A’s annual report it was stated that the following will be given such added focus: Mortgages – Due to the growing significance in relation to the Bank’s business; Personal Lending – Due to the opportunities that are believed to exist in this sector; Card Services – Also due to the opportunities that are believed to exist;
What is important to realise here is that not all products and services can, in practice, receive additional focus and other resources. Such an approach of selective further investment is advocated by De Wit and Meyer (2005). Those that do receive further investment should only be for valid reasons, as we have seen above in the case of Bank A. The growth/share matrix provides an easy way for helping identify ideal candidates and indeed the three products of Bank A that were identified can be considered so. Unfortunately perhaps the service that most merited attention, Alternative Delivery Channels, was not mentioned by Bank A. Now Bank B can easily have spotted this lack of added investment and/or focus in Alternative Delivery Channels by Bank A and take action on their part to further strengthen their own equivalent service to the long-term detriment of Bank A. More attention to the information provided by the growth/share matrix could have perhaps avoided this hypothetical scenario.
Conclusion
The BCG growth/share matrix was introduced at a time when it seemed a natural development from certain management ideas and concepts such as ‘portfolio planning’ and ‘strategic business unit’. Indeed one can arguably label the BCG growth/share matrix, together with other such as the GE/McKinsey one as part of the fad of managing by matrix that seemed so in vogue at the time. There is nothing reprehensible about managing by matrix, but as with any management tool it is not without its limitations as has amply been demonstrated. Any organisation that wishes to utilise the growth/share matrix must be amply aware of these limitations and not base itself too much on the purported benefits, it should first and foremost be considered as a basic guide to strategic analysis – it is not a panacea for strategic ills. Competitors may capitalise on those organisations that put too much faith in the growth/share matrix, and such competitor action may be regretted at a later stage. Perhaps the BCG growth share matrix may have been correctly described in a short paragraph by Anon. (2002): “Again the BCG growth/share matrix gained widespread popularity because of its simplicity. Many senior executives could appear to be engaged in strategic analysis without in fact ever doing any actual thinking. The logical foundations of the matrix were to say the least shaky. American and European executives got rid of question marks and dogs too rapidly and left many markets wide open for the Japanese to come into in the 1970s.” | 
