This article provides a detailed response to: How can the BCG Growth-Share Matrix be used to evaluate the potential of new business models in the sharing economy? For a comprehensive understanding of BCG Growth-Share Matrix, we also include relevant case studies for further reading and links to BCG Growth-Share Matrix best practice resources.
TLDR The BCG Growth-Share Matrix helps organizations strategically evaluate and allocate resources for new sharing economy ventures based on market growth and share.
Before we begin, let's review some important management concepts, as they relate to this question.
The BCG Growth-Share Matrix, a strategic business tool developed by the Boston Consulting Group in the 1970s, provides a framework for evaluating the potential of different business units or product lines based on their market growth rate and relative market share. This model categorizes business units into four quadrants—Stars, Question Marks, Cash Cows, and Dogs—each representing a specific strategic consideration. In the context of the sharing economy, this matrix can be particularly useful for organizations looking to evaluate new business models or ventures. The sharing economy, characterized by peer-to-peer based sharing of access to goods and services, has seen exponential growth, driven by digital platforms that connect users and providers.
Application to the Sharing Economy
In applying the BCG Growth-Share Matrix to the sharing economy, organizations can categorize their ventures or potential business models into the four quadrants to determine strategic actions. For instance, a new sharing platform with a high market growth rate but low market share would fall into the "Question Marks" category. This signals the organization to consider significant investment to increase market share or to reassess the venture's viability. Conversely, a well-established platform with high market share in a mature market could be seen as a "Cash Cow," indicating that the organization should capitalize on this venture to fund other projects.
For sharing economy ventures in the "Stars" quadrant, characterized by high growth and high market share, organizations should focus on growth strategies and investment to maintain or enhance their market position. This could involve expanding into new markets, enhancing platform features, or increasing user engagement. On the other hand, ventures in the "Dogs" quadrant should be evaluated for divestiture or repositioning, as they represent low growth and low market share.
It is crucial for organizations to continuously monitor and reassess their portfolio of sharing economy ventures using the BCG Matrix as market conditions evolve. This dynamic approach allows for the reallocation of resources to maximize overall portfolio value and strategic alignment.
Strategic Insights and Actionable Recommendations
Organizations should leverage the BCG Growth-Share Matrix to identify strategic priorities and allocate resources efficiently across their sharing economy ventures. For "Question Marks," it is imperative to conduct thorough market research and competitive analysis to inform the decision on whether to invest heavily for growth or to divest. This involves understanding user needs, market trends, and the competitive landscape to identify opportunities for differentiation and market capture.
For ventures classified as "Cash Cows," organizations should focus on operational excellence and efficiency to maximize profit margins while exploring opportunities for reinvestment in other quadrants. This might include leveraging data analytics to optimize platform performance, reduce costs, and enhance user experience, thereby sustaining profitability and funding growth initiatives.
"Stars" require aggressive investment in marketing, innovation, and expansion strategies to sustain growth and fend off competition. Organizations should prioritize these ventures by deploying their best talent, investing in technology, and exploring strategic partnerships to solidify their market position and capitalize on growth opportunities.
Real-World Examples
Airbnb, a leader in the sharing economy, exemplifies a "Star" venture that has successfully capitalized on its market position. Through continuous innovation, global expansion, and strategic partnerships, Airbnb has maintained its growth trajectory and market dominance. The organization's focus on enhancing user experience, expanding its offerings, and entering new markets has allowed it to sustain its "Star" status within the BCG Matrix framework.
Uber, another prominent player in the sharing economy, has navigated through different quadrants of the BCG Matrix over time. Initially a "Question Mark," Uber invested heavily in market expansion and technology, transitioning into a "Star." The organization's strategic focus on diversification, such as expanding into food delivery with Uber Eats, illustrates the dynamic application of the BCG Growth-Share Matrix in guiding strategic decisions and resource allocation.
These examples underscore the importance of using the BCG Growth-Share Matrix as a strategic tool for evaluating and guiding the development of new business models in the sharing economy. By categorizing ventures according to their market growth and share, organizations can make informed decisions on investment, divestiture, and strategic focus, ultimately driving sustainable growth and competitive advantage.
Best Practices in BCG Growth-Share Matrix
Here are best practices relevant to BCG Growth-Share Matrix from the Flevy Marketplace. View all our BCG Growth-Share Matrix materials here.
Explore all of our best practices in: BCG Growth-Share Matrix
BCG Growth-Share Matrix Case Studies
For a practical understanding of BCG Growth-Share Matrix, take a look at these case studies.
BCG Matrix Analysis for Semiconductor Firm
Scenario: A semiconductor company operating globally is facing challenges in allocating resources efficiently across its diverse product portfolio.
BCG Matrix Analysis for Specialty Chemicals Manufacturer
Scenario: The organization in focus operates within the specialty chemicals sector, facing a pivotal moment in its strategic planning.
Luxury Brand Portfolio Optimization in the High-End Fashion Sector
Scenario: A luxury fashion house is grappling with portfolio optimization amidst shifting consumer trends and market volatility.
BCG Matrix Assessment for Retail Apparel in Competitive Market
Scenario: The organization in focus operates within the highly competitive retail apparel sector.
BCG Matrix Analysis for Boutique Food & Beverage Firm
Scenario: A mid-sized Food & Beverage firm specializing in artisanal cheeses has been grappling with portfolio management issues.
Revitalizing a High Tech Firm through BCG Growth-Share Matrix Optimization
Scenario: A high-tech electronic device manufacturing firm has been grappling with declining profitability and market share over the past two years.
Explore all Flevy Management Case Studies
Related Questions
Here are our additional questions you may be interested in.
Strategy & Operations, Digital Transformation, Management Consulting
This Q&A article was reviewed by David Tang. David is the CEO and Founder of Flevy. Prior to Flevy, David worked as a management consultant for 8 years, where he served clients in North America, EMEA, and APAC. He graduated from Cornell with a BS in Electrical Engineering and MEng in Management.
It is licensed under CC BY 4.0. You're free to share and adapt with attribution. To cite this article, please use:
Source: "How can the BCG Growth-Share Matrix be used to evaluate the potential of new business models in the sharing economy?," Flevy Management Insights, David Tang, 2025
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