This is because the underlying principle was that a high relative market share delivered profitability through the experience curve benefits – which gave the firm a cost leadership advantage. Traditionally, relative market share has been calculated using unit market share.
It is possible to calculate relative market share – the bottom or horizontal axis of the BCG matrix – by using dollar market share instead of unit market share.
Unit market share versus dollar market share This point gives rise to the most effective way of classifying between cash cows and dogs and between stars and question marks – as is discussed below in the section on what level of relative market share to use when graphing the BCG matrix.
