Boston matrix

• Boston Matrix - model which helps bus analyse their portfolio of businesses + brand + products

  tool used in marketing +business strategy
• explanation - helps managers plan for balanced portfolio

  two dimensions, market share + market growth

  used assess new + existing products in terms of market potential

  each product goes into one of the groups
• has 4 categories:

  • cash cow
  • star
  • dog
  • question mark
• Star - high market share + high market growth

  in growth phase of product lifecycle

  production remain consistent whilst profits harvested
• Question mark - product enjoy high market growth but low market share

  product just launched in market + building customer loyalty

  product invested in while market share builds
• cash cow - product reaching maturing in product life cycle but has customer loyalty

  products should be produced until sales decline
• Dog - product faces decline stage in declining markets

  in decline phase of product lifecycle

  remove from sale
• uses of Boston Metric: starting point reviewing existing products/lines to decide future strategy + budgeting

  analyse opportunities or problems with product portfolio

  conclusion - transfer surplus was from cash cows to stars and question marks, close down or sell off dogs

  question marks reveal as dogs or stars

  cash cows become drained so become dogs
• limitations of Boston Matrix - 2 main scales low and high but some businesses may be in the middle so medium

  high market share not always lead to high profits as high costs involved in high market share

  growth rate + market share not only indicators of profitability

  ignore and overlooks indicators

  simplistic in approach