The BCG Matrix produces a framework for allocating resources

The BCG Matrix produces a framework for allocating resources among different business units and makes it possible to compare many business units at a glance. But BCG Matrix is not free from limitations, such as- BCG matrix classifies businesses as low and high, but generally businesses can be medium also. Thus, the true nature of business may not be reflected. Market is not clearly defined in this model. High market share does not always leads to high profits. There are high costs also involved with high market share. Growth rate and relative market share are not the only indicators of profitability. This model ignores and overlooks other indicators of profitability. At times, dogs may help other businesses in gaining competitive advantage. They can earn even more than cash cows sometimes. This four-celled approach is considered as to be too simplistic

Solution

what ever the explanation you have give is cent per cent correct. but to be say specifically, it is an easiest method of business analysis to understand. and based on the activites and actions of the business firm, we can put them into any of these four. and based on its positon, we can prsume at what conditions it is operating the business, what are the consequeces they are facing in the market, what kind of actions and remedies they should take and so on.

but it does not mean that, every business firm has to comes under any of these four types and operates with only these characteristics.