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This menu engineering is a product of Michigan State University's School of Hospitality.
the goal of the exercise is to comparatively rank your menu items according to both profitability and popularity and to then graph these results using the BCG Matrix. This matrix utilizes four quadrants, and though the names have changed a bit during their application to the hospitality industry, their meaning has remained generally consistent.
Quadrant Definitions:
"Stars" are those menu items that are both the most popular and the most profitable. These are often house specialties and are the menu items that you want to sell most frequently due to their high contribution margin.
"Plowhorses" are menu items that are above average in popularity, but not in profitability. Overall, these items produce consistent profit for the business, but are not stars because their contribution margin is below average.
"Challenges" are the converse of plowhorses. They are highly profitable menu items, but not very popular.
Finally, "Dogs" are those items that are neither popular nor profitable, in comparison to your other menu items. Serious consideration should be given to eliminating these items from the menu.
To see how to track your menu items and get suggestions, Click here