The main advantages of the growth/share matrix are its construction simplicity, the easy availability of the data required to build it and the fact that its construction is not subject to interpretation.
The data necessary to construct a growth/share matrix are market growth, market shares and revenues. These figures are available and easy to find in most industries. They are not subject to interpretation and thus cannot be manipulated to reflect management bias.
Two major issues basic to this method are worth mentioning: the use of a single variable each for cash usage and cash generation and the normative implications of portfolio assessment.
It is clear that each of the financial dimensions is not appropriately represented by a single indicator. Therefore, errors may be introduced in the analysis if all the determinants of cash usage and cash generation are not used. Other portfolio analysis tools use a more complex construct to determine the attractiveness of a market and the strength of the brand competitive position. These tools are not discussed in the manual.
Even more basic is the problem of the implications of the portfolio assessment. The growth/share matrix provides a potentially useful diagnostic tool. It summarizes, simply, where the firm stands in terms of its relative market share position and in terms of growth within the segment in which it conducts business. It can even present some elements of the financial equilibrium situation of the firm. However, this type of portfolio analysis provides little information on how to reallocate resources across the brands/segments. This is due to the lack of information in this analysis about the opportunities for gaining share and about the costs of gaining this share. These opportunities and costs may differ widely for different alternatives.