Growth Share Matrix framework

We're building a comprehensive knowledge library about product development as part of our mission. The library is for anyone looking to make better decisions — primarily decisions about how to further develop a product. Whether you're an inventor, a product manager, or a Chief Product Officer, using a structured decision-making method increases your chances of building the right things for the right audience (build the right thing for the right audience). Today we'll introduce the Growth Share Matrix framework.

Framework name: Growth Share Matrix.

Inventor: Alan Zakon.

Year of first use: 1968.

Link to the author's original research: Web — Boston Consulting Group lays out the history of the matrix. Book — Strategic Management: A Critical Introduction (2016) documents the matrix's earliest use. Essay — The Product Portfolio gives a structured description of the framework.

Key figures in the framework's development:

1. Bruce Henderson.

Key milestones in the framework's development:

1. Popularization of the Growth Share Matrix in the The Product Portfolio essay.

History of First Use

Alan Zakon laid the foundations of the matrix in the 1960s while designing an investment strategy for Mead Paper Company, a paper manufacturer. His task was to advise whether the firm should diversify into an industry with higher growth potential than the traditional paper business.

At the time the company was investing heavily in acquisitions outside its core business and expanding rapidly. Zakon was looking for an effective way to tell productive acquisitions apart from those that only drained the company's resources. To his surprise, he found that the company's core business — paper manufacturing — was pulling resources away from all the other acquisitions. He therefore advised the company to let the paper operation "gradually die off" and redirect the freed-up resources toward funding acquisitions with greater appeal and growth potential.

With this move he laid the foundation of a matrix that answers strategic questions: "Which industries should we as a company operate in?" and "How do we optimize the allocation of resources across those industries?"

Basic Prioritization Principles

The core idea of the matrix is prioritizing resources according to a company's industries and their profitability. In product development, this means prioritizing resources across the individual products in a product portfolio.

The matrix has two axes and four quadrants that represent four ways to prioritize resources:

• Market Growth = the X axis shows the growth rate of the market as a whole for a given product.

• Market Share = the Y axis shows the market share of a specific product.

Both metrics are assessed objectively. Once the values are filled in, you get a simple 2×2 prioritization matrix in which each quadrant serves a specific purpose.

The principle behind the whole matrix is the extreme profitability of market leaders (stars), which creates a self-reinforcing cost advantage over the competition that is hard to replicate across the market. In the end, every product is either a star or a pet — a winner or a loser. The framework has a set of basic rules that determine how to handle resources (mostly money) for each product:

• Growth requires investing resources (money above all) in order to sustain the factors that drive further growth.

• High margins and high market share go hand in hand.

• High market share can either be earned or bought; if it is bought, it demands additional resources (mostly money).

• No market for products and services grows forever. Profit from a given market can be realized once market growth slows or never at all. Profit generated at that stage can no longer be effectively reinvested into the same product that produced it to achieve a higher return on investment.

Quadrant I — Question Marks

The "top-right" quadrant represents the so-called Question Marks — products with high market growth but low market share. These products are either given more resources or have their development stopped entirely, depending on how likely they are to become stars. Their defining trait is high capital intensity, especially the need for cash to grow market share.

Quadrant II — Stars

The "top-left" quadrant represents the so-called Stars — products with high market growth and high market share at the same time. These products are worth investing in, because they have strong potential to become cash cows if they end up as market leaders by the time overall market growth, and with it the product's market share, slows down.

Quadrant III — Cash Cows

The "bottom-left" quadrant represents the so-called Cash Cows — products with low market growth but high market share. Products in this quadrant generate substantial capital (cash) while needing relatively few resources to maintain. They should be "milked" for as long as they keep generating profit. The profit they produce is best reinvested elsewhere, ideally into Question Marks.

Quadrant IV — Pets

The "bottom-right" quadrant represents the so-called Pets — products with low market growth and low market share. Products in this quadrant should be changed, sold, or shut down, because they have little chance of succeeding within the overall portfolio even if they show a positive accounting profit. Their defining trait is high maintenance cost.

Prioritization Example

Quadrant I — Question Marks

• Cars powered solely by batteries and electricity, such as the Toyota bZ4X. This technology has been around for a while and has both fans and haters.

Quadrant II — Stars

• Cars powered by a combination of gasoline or diesel and battery electricity, such as the Toyota RAV4 Hybrid. This is an affordable option that the public sees as greener than a purely gasoline or diesel engine and, at the same time, more efficient in terms of fuel consumption.

Quadrant III — Cash Cows

• Cars powered by gasoline or diesel, such as the Toyota Corolla. This is a vehicle based on technology that has been successful and reliable for decades.

Quadrant IV — Pets

• Cars powered by hydrogen, such as the Toyota Mirai. As of 2025 this technology has yet to catch on; it is an expensive vehicle that is practically impossible to refuel on the ordinary network of filling (gas) stations.

Visual Prioritization Example