A way of visualising the idea of product life cycle in terms of market share and growth.
This 2x2 matrix suggests four basic marketing strategies - each product or Strategic Business Unit (SBU) is classified as one of the following:-
These are SBUs that have a high relative market share in a market with low growth - i.e has entered maturity. The message is harvest profits.
These are the highfliers - SBUs with a high relative market share in a high growth market. However they still require investment to maintain market share - so they might not be as profitable as Cash Cows - they might even need more investment than they create in profit.
But these will be tomorrows Cash Cows providing market share is maintained
These are SBUs in high growth markets - but they have a realtively low market share. To remedy this they will need very high investment. Do you invest, sell or look for a niche?
Dogs are those SBUs with low market share in low growth markets - the market might be in decline or a prolonged maturity. Do you divest or hang on in there?
Well dogs might actually have some advantages: They might actually create some profit, the market might not be exciting today - but it might be tomorrow. They might also have strategic importance - competitors can build their market presence by moving into undefended dog markets. Hence the term 'guard dogs'.
See also product life cycle