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The Boston consulting Group in 1968 came up with the idea. Cost elements of value added tend to drop by 20-30% each time accumulated production (in units) doubles.
Firms following parallel expansion paths: Firms with the biggest market share will have the lowest unit costs.
Trailing firms will never be able to overtake the market leader
Eventual market dominance is decided early.
Prescriptive
Go for market share at the expense of margin with your product as early as possible.
But
1. Bottoms out at some stage
2. Experience advantages will be obsoleted by technology
3. Only works if you’re using the same production technique