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Understanding the Boston Matrix: Maximizing Product Portfolio Performance

The Boston Matrix is a strategic tool for analyzing a company's product portfolio based on market share and growth. It categorizes products into four quadrants: Stars, Cash Cows, Problem Children, and Dogs. Each quadrant has unique implications for resource allocation and marketing strategies. Stars have growth potential, Cash Cows generate revenue, Problem Children require careful consideration for investment, and Dogs may need reevaluation or removal. Understanding these categories helps firms make informed decisions on product development and promotional costs, ultimately driving business success.

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Understanding the Boston Matrix: Maximizing Product Portfolio Performance

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Presentation Transcript

  1. Product Portfolio Analysis (The Boston Matrix) MOOO!

  2. What is it?Why is it useful?

  3. The Matrix High Market share low Low Rate of growth for the whole market High

  4. Problem Children High Market share low Low Rate of growth for the whole market High

  5. Problem children • Implications: • What are the chances of these products securing a hold in the market? • How much will it cost to promote them to a stronger position? • Is it worth it?

  6. Stars High Market share low Low Rate of growth for the whole market High

  7. Stars • Huge potential • May have been expensive to develop • Worth spending money to promote • Consider the extent of their product life cycle in decision making

  8. Cash Cows High Market share low Low Rate of growth for the whole market High

  9. Cash Cows: • Cheap to promote • Generate large amounts of cash – use for further R&D? • Costs of developing and promoting have largely gone • Need to monitor their performance – the long term? • At the maturity stage of the PLC?

  10. Dogs High Market share low Low Rate of growth for the whole market High

  11. Dogs • Are they worth persevering with? • How much are they costing? • Could they be revived in some way? • How much would it cost to continue to support such products? • How much would it cost to remove from the market?

  12. What to do with ‘Dogs’ WOOF!

  13. Balance Do we want a field of cows? MOOO!

  14. Balance and the PLC Sales (2) (3) (1) D B C A Time

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