The Product Portfolio and Man’s Best Friend

The widespread use of the BCG matrix (and its imitators) is testimony to its power and simplicity. This study of the matrix has not been an attempt to discredit it. In fact, the findings square with the primary theme of BCG: businesses in the four cells of the matrix have quite different tendencies to generate or consume cash. The primary point of disagreement between BCG and this study has to do with the performance of Dogs. In this sample of industrial-product businesses, the average Dog had a positive cash flow, even greater than the cash needs of the average Wildcat. With this finding as a cornerstone, the following themes have been developed in this article: Dogs perform better than BCG has led us to believe. In fact, some Dogs perform very well. Certain strategic factors are associated with high profitability among Dogs. The notable factors are low capital intensity, attention to efficiency, a narrow focus, high product quality, and low to moderate prices. Top management of a company can affect whether Dogs achieve their potential as long-term, reliable cash generators. Among the ways: assign first-rate managers to head Dogs, avoid incessant milking, and use substantive rewards and symbolic actions to maintain morale in Dogs. The U. S. economy is in a slow growth era which is not expected to become dynamic again soon. The issue of what to do with Dog businesses is becoming a pressing question, both for public-policy makers and corporate strategists. Much more research is needed on how to thrive in a mature setting. What is clear is that executives should take a positive, creative view of how to get the full potential in terms of magnitude and duration from Dogs.