What is the primary purpose of the BCG Matrix?

• A. To evaluate a portfolio of businesses.
• B. To forecast currency fluctuations.
• C. To design product packaging.
• D. To measure employee performance.

Answer: (A)

The BCG Matrix is a portfolio analysis framework used to evaluate a company's set of business units or product lines and guide how resources should be allocated among them. It plots each unit on two dimensions—market growth and relative market share—creating four categories: Stars, Cash Cows, Question Marks, and Dogs. The primary purpose is to help management decide where to invest more, where to harvest for cash, and where to divest, in order to balance growth opportunities with cash generation across the portfolio. It’s not about forecasting currency changes, designing packaging, or measuring employee performance.