Final answer:
The BCG matrix is a portfolio analysis framework that categorizes business units or products into four segments: Stars, Cash Cows, Question Marks, and Dogs, based on market growth and market share, to help in strategic planning.
Step-by-step explanation:
The BCG matrix for portfolio analysis consists of a framework that helps businesses evaluate the relative performance of individual products or business units. This matrix categorizes them into four different types based on market growth and market share:
- Stars: High market growth, high market share.
- Cash Cows: Low market growth, high market share.
- Question Marks: High market growth, low market share.
- Dogs: Low market growth, low market share.
Each category represents a certain type of investment and expected cash flow. Businesses use the BCG matrix as a tool to allocate resources effectively among different business units or products, and it's a part of strategic planning in many companies.