© Academy of Management Journat 1982, Vol.25, No. 3, 510-531.

Strategic Attributes and Performance in the BCG Matrix— A PIMS-Based Analysis of Industrial Product Businesses^
DONALD C. HAMBRICK IAN C. MacMILLAN DIANA L. DAY Columbia University

This paper empirically explores the performance tendencies and strategic attributes of businesses in the four cells of the Boston Consulting Group product portfolio matrix. Businesses differed in their performance and strategic attributes, according to the two dimensions of the BCG matrix—product life cycle stage (growth rate) and market share. Most discussions of business-level strategy fall into one of three groups. First are normative propositions about which strategic actions make sense under different conditions. These prescriptions typically are set forth by seasoned observers of organizations (Andrews, 1971; Glueck, 1976; Katz, 1970), but, so far, creation of these ideas has substantially outpaced empirical tests of their validity. A second category of literature is empirically based, but aimed at demonstrating universal "laws" of strategy. Findings on the pervasive positive effects of market share (Chevalier, 1972; Schoeffler, Buzzell, & Heany, 1974) and the experience curve (Boston Consulting Group, 1968) are primary examples. The third group also is empirical but concludes that so many contingent factors exist that strategy must be highly situational (Hatten, Schendel, & Cooper, 1978). In the latter vein, Hofer (1975) set forth what he considered to be a manageable list of 20 contingent factors (narrowed down from 54) that affect strategy for
The authors gratefully acknowledge sponsorship by the Strategy Research Center, Columbia University Graduate School of Business, and generous support from the Strategic Planning Institute, Cambridge, Mass. Thomas Lenz, William Newman, Max Richards, Sidney Schoeffler, and Michael Tushman made helpful suggestions on earlier drafts. 510

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Hambrick, MacMittan, and