The two measures the bcg matrix uses to classify sbus and products in the portfolio are relative market share and market growth rate.
A key limitation of BCG and other formal approaches to portfolio planning is that they focus on classifying current businesses and provide little advice for future planning.
According to the BCG matrix, stars are high-share, high-growth products. When the market growth slows, these products become cash cows.
Relative market share, or RMS, is the amount of market share that a company has compared to its biggest competitor. The market growth rate is the rate at which a market's size is increasing. This is usually expressed as a percentage per annum.
Market growth comparisons are a primary barometer of the progress of a business. The market growth rate is a key factor to be considered when calculating the development of a specific product in a particular market.
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