A retrenchment strategy is a corporate-level strategy that seeks to reduce the size of an organization's operations. B. Corporate portfolio matrix is one of the most popular approaches to corporate-level strategy. The BCG matrix developed by the Boston Consulting Group is a strategy tool to guide resource allocation decisions based on market share and growth of SBUs. The matrix identifies four business groups. Cash cows have low growth and high market share.
Stars have high growth and high market share.
Question marks have high growth and low market share. Dogs have low growth and low market share. The BCG matrix assumes the existence of a cumulative learning curve which speculates that when a business increases the amount of product manufactured, the per-unit cost of the product will decrease. In recent years, the BCG matrix has lost much of its merit. However, the corporate portfolio matrix still is a useful concept because it provides a framework for understanding distinct businesses and establishes priorities for making strategic resource allocation decisions.