What’s is: A dog is a product or business unit with a low market share and in a low-growth market. It is one of the four categories of the BCG matrix apart from the star, cash cow, and question mark.
A low market share indicates the product is less competitive. And, the company posted low sales. Consumers do not like it because of poor product quality and features or high prices. They prefer competitors’ products because they are better, for example, because they are cheaper, more unique, or even because of superior customer service.
If the market is going into a decline soon, discarding the Dogs make the most sense. They are the main candidates for divestment because they are a money trap for the company. The company may try to sell its rights to another company or sell some assets (such as equipment) used in the production process. Thus, the company can focus its resources on other more competitive products such as the Star category.
Products in the dogs quadrant are in a market that is growing slowly and where the product(s) have a low market share. Products in the dogs quadrant are typically able to sustain themselves and provide cash flows, but the products will never reach the stars quadrant. Firms typically phase out products in the dogs quadrant (as indicated by B) unless the products are complementary to existing products or are used for a competitive purpose.
The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio. The BCG Matrix is one of the most popular portfolio analysis methods. It classifies a firm’s product and/or services into a two-by-two matrix. Each quadrant is classified as low or high performance, depending on the relative market share and market growth rate. Learn more about strategy in CFI’s Business Strategy Course.
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What to Do with the Dogs in Your BCG Matrix
Products in the dogs quadrant are in a market that is growing slowly and where the product(s) have a low market share. Products in the dogs quadrant are typically able to sustain themselves and provide cash flows, but the products will never reach the stars quadrant. Firms typically phase out products in the dogs quadrant (as indicated by B) unless the products are complementary to existing products or are used for a competitive purpose.
The Boston Consulting Group Matrix (BCG Matrix), also referred to as the product portfolio matrix, is a business planning tool used to evaluate the strategic position of a firm’s brand portfolio. The BCG Matrix is one of the most popular portfolio analysis methods. It classifies a firm’s product and/or services into a two-by-two matrix. Each quadrant is classified as low or high performance, depending on the relative market share and market growth rate. Learn more about strategy in CFI’s Business Strategy Course.