According to the BCG matrix, what happens to investments as an industry expands?

In the context of the BCG matrix, as an industry expands, it is common for its products or services to be categorized into different segments based on their market growth and market share. The BCG matrix classifies these segments as Stars, Cash Cows, Question Marks, or Dogs.

When an industry is experiencing expansion, it typically sees the emergence of more competitive products that can be classified as Stars or Question Marks, which require investment to increase their market share. Over time, some of these products may become Cash Cows, which generate steady revenue with less investment due to their established position in a mature market. Others may be classified as Dogs, which do not generate significant profits and are often candidates for divestment.

Thus, the classification as either Cash Cows or Dogs emphasizes that not all investments yield positive returns, and strategic decisions must be made based on the industry dynamics. This categorization helps businesses understand where to allocate resources effectively as the industry grows.