Beyond that, some critics have also pointed out the underlying assumption that cash generation is always organic with a company and does not take into account many other ‘inorganic’ or external cash generating instruments that are available which could affect a portfolio and market position. It does not take into account technological discontinuities that can alter the entire shape and dynamics of a marketplace within a very short space of time. Another one of the problems that practitioners have with the BCG matrix is that it is difficult to delineate and define what a ‘market’ is, and, consequently, to measure market share precisely. In this life cycle, the mature and profitable funds and fuels the new and growing while the old falters and eventually is terminated. The main criticism levelled at the matrix is the assumption that all of a company's products and business units work in an interconnected life cycle. It has, since the 1980s, been subject to various criticisms of its shortcomings and has become less reliable as a framework for practical marketing action. The BCG remains a useful framework for portfolio analysis. Management must choose between further speculative investment and even withdrawal, depending on their prospects in their target markets. They are therefore cash users and could become stars of the future. Problem children (or question marks) need considerable cash investment because they have a low relative share but high growth prospects. They typically take up more management time than warranted and, unless they can be strategically justified, such as contributing to overheads, are potential candidates for divestment. Dogs, by contrast, have low market shares in low-growth markets and tend to generate either a loss or a relatively low profit.
Cash cows are assumed to enjoy lower cost, economies of scale, and high profit margins. Excess cash is provided by the cash cows that are entering a period of low growth in mature markets but which need relatively little cash investment. Stars of today may become the cash cows of the future. For example: stars are businesses or products with outstanding opportunities that do not generate excess cash because they are still growing market share in face of competition.
The matrix is not static and the interrelationship between the various classifications makes the model very useful, particularly for developing market strategies.