Objective Tagging: The BCG Product Portfolio: Stars, Cows, Question Marks, Dogs
Letting the BCG Matrix Tell You When to Milk and When to Feed
Bruce Henderson’s Boston Consulting Group skimmed the Fortune 500 in 1968 and noticed a budgeting paradox: companies starved tomorrow’s profit engines while fattening fading cash generators. His answer was a 2 × 2 grid plotting relative market share against market growth rate, birthing the Growth-Share Matrix:
| High Growth | Low Growth | |
|---|---|---|
| High Share | Star | Cash Cow |
| Low Share | Question Mark | Dog |
Half a century later, SaaS PMs convert the same idea into tag sets that illuminate when to double-down, divest, or harvest—and RoadmapOne turns slide-deck folklore into shareable, data-driven heat-maps.
Modernising the Axes for SaaS
- Market Growth: Annual TAM growth or segment CAGR over the next 3–5 years.
- Relative Share: Your ARR as a fraction of the segment leader’s ARR.
Interpreting the Quadrants
| Quadrant | Funding Stance | Goal | Typical Roadmap Moves |
|---|---|---|---|
| Star | Aggressive | Defend leadership, scale ops | Global feature parity, performance scaling |
| Cash Cow | Efficiency | Maximise margin, delay decline | Cost-to-serve optimisation, pricing upgrades |
| Question Mark | Experimental | Win share or exit | Rapid iteration, marketing A/B, feasibility spikes |
| Dog (sometimes called Pet) | Minimal | Harvest cash, divest | Sunsetting, partnership exits |
Tagging Workflow
- Set Threshold Rules (e.g., High Growth > 15 % CAGR, High Share > 0.4 relative share).
- Auto-Assign Tags nightly via API or manual override during quarterly review.
- Link Funding Gates: Stars auto-get > 25 % of new capacity, Dogs < 5 %. RoadmapOne enforces via capacity planner.
Example Portfolio Snapshot
| Product Line | Growth (%) | Rel. Share | Tag |
|---|---|---|---|
| Core Billing | 4 | 0.7 | Cash Cow |
| AI Insights | 28 | 0.6 | Star |
| SMB Add-ons | 22 | 0.1 | Question Mark |
| On-Prem Legacy | −3 | 0.2 | Dog |
At a glance, the board grasps why 60 % of next quarter’s headcount flows to AI Insights while Legacy shrinks to maintenance mode.
Case Study: CyberSec Vendor “ShieldX”
2018: Network firewall appliance—a Cash Cow—funded 80 % of R&D.
2019: Cloud-native SASE platform launched, tagged Question Mark.
2021: Rapid uptake pushed growth > 35 % and share > 0.5—RoadmapOne auto-promoted the tag to Star, triggering headcount reallocation before competitors pounced.
2024: Appliance share fell; tag flipped from Cash Cow to Dog, initiating sunset communications.
Share-driven tags made the transition politically survivable: numbers, not turf wars, dictated resource shifts.
Pitfalls and Remedies
- Stale Data – Market growth forecasts expire; schedule auto-refresh.
- Emotional Attachment – Founders cling to Dogs. Use tags to enforce objectivity.
- Question-Mark Paralysis – Endless indecision burns cash. Set clear time-boxed metrics: convert to Star or pivot.
Blending with Other Tag Lenses
Stars often align with Horizon 2; Cash Cows with Horizon 1; Question Marks with Transformational bets. Overlay in RoadmapOne to check if high-risk SVPG Feasibility spikes cluster in the right quadrant.
Boardroom Narrative
“Our Star—AI Insights—consumes 32 % engineering, but adds 60 % of net-new ARR. Meanwhile the Dog costs 8 % and drops 1 % ARR. Divesting now boosts margin two points.”
The argument is short because the quadrant speaks.
Key Takeaways
- BCG tags transform static quadrant slides into dynamic budget alarms.
- Decisions on funding, divesting, or milking become data-driven, not political.