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BCG Matrix Example: Software Product Portfolio

A software company with five products, one of which quietly funds all the others.

This portfolio has the classic shape: one mature product paying for everything, one genuine star, two question marks competing for the same budget, and a legacy product nobody has been willing to kill.

The value of writing it out was making the subsidy explicit. The legacy product had been described as profitable for years; once support and engineering attention were allocated properly, it was not.

Open this canvas in the editor
1

Stars — High Growth, High Share

  • Core platform — 34% share in a market growing 22% a year
  • Consumes most of engineering to hold position
  • Two competitors gaining; under-investment would be costly
  • Decision: continue to fund at current level
2

Question Marks — High Growth, Low Share

  • Analytics add-on — 6% share, market growing 30%
  • Mobile product — 4% share, market growing 25%
  • Each currently funded at roughly half the level needed to lead
  • Decision: fully fund analytics, sunset mobile investment
3

Cash Cows — Low Growth, High Share

  • Legacy on-premise licence — 51% share, market flat
  • Generates 60% of company profit on minimal investment
  • Requires only maintenance and compliance work
  • Decision: defend, minimise spend, plan for eventual decline
4

Dogs — Low Growth, Low Share

  • Standalone reporting tool — 3% share, market shrinking
  • Nominally profitable, but consumes real engineering attention
  • Kept for 11 customers, two of whom are strategic
  • Decision: migrate those customers to core, then discontinue

What this canvas reveals

  • One cash cow funding four other lines is a concentration risk, not just a strength. If it declines, everything below it is exposed simultaneously.
  • Two question marks were each receiving half the budget needed to win. Choosing one and stopping the other was the single biggest decision the matrix produced.
  • The legacy product's real cost was engineering attention, which never appeared on its P&L line.

Block by block

1Stars — High Growth, High Share

  • Core platform — 34% share in a market growing 22% a year
  • Consumes most of engineering to hold position
  • Two competitors gaining; under-investment would be costly
  • Decision: continue to fund at current level

2Question Marks — High Growth, Low Share

  • Analytics add-on — 6% share, market growing 30%
  • Mobile product — 4% share, market growing 25%
  • Each currently funded at roughly half the level needed to lead
  • Decision: fully fund analytics, sunset mobile investment

3Cash Cows — Low Growth, High Share

  • Legacy on-premise licence — 51% share, market flat
  • Generates 60% of company profit on minimal investment
  • Requires only maintenance and compliance work
  • Decision: defend, minimise spend, plan for eventual decline

4Dogs — Low Growth, Low Share

  • Standalone reporting tool — 3% share, market shrinking
  • Nominally profitable, but consumes real engineering attention
  • Kept for 11 customers, two of whom are strategic
  • Decision: migrate those customers to core, then discontinue