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.
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
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
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
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