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| The Boston Matrix |
The Boston Matrix is a means of analyzing the product portfolio and informing decision making about possible marketing strategies
- Stars are products in markets experiencing high growth rate with a high/increasing market share with potential for high revenue
- Cash Cows have high market share but low market growth. These products are matured and do not need high cost to support them. They have high cash revenues
- Dogs are products in low growth markets with declining market share. They are associated with negative cash flow and may require large sums of money to support
- Problem Children have low market share in high growth markets. They may produce negative cash flow. Potential for the future?
Advantages of Boston Matrix
- Useful to understand the effectiveness of the product portfolio
- Different approaches will be devised for different products in different categories
- It is useful to plan whether to include a new product in the portfolio and which product to withdraw from the portfolio
Disadvantages of Boston Matrix
- It only shows the current position of the product and does not specify how to improve the product
- The data relating to market growth and market share changes constantly so it is difficult to derive information
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