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Boston Matrix

Boston Matrix. Aiden Tait , Block C. Function of the boston matrix. The Boston Matrix was created by the Boston Consulting Group It’s a means of analysing a business’s range of products or a business’s portfolio of products

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Boston Matrix

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  1. Boston Matrix Aiden Tait, Block C

  2. Function of the boston matrix • The Boston Matrix was created by the Boston Consulting Group • It’s a means of analysing a business’s range of products or a business’s portfolio of products • A portfolio is a group of products/businesses that make up on whole business

  3. Summary of the boston matrix • The Boston Matrix is made up of four categories that certain products fall under • These categories are dogs, question marks, stars, and cash cows • The goal of using this matrix is to balance a business’s portfolio • This can be done by placing an equal amount of products within each category

  4. Chart

  5. The Four SECTIONS – Dogs and Question Marks • Question Marks (Problem Child) – products that have the potential to become a dog or a star because they have low market share but are in a growing market • Dogs – products that have low market share in a slowly growing market, are unappealing, or fail to bring revenue to a business

  6. The Four sections – stars and cash cows • Stars – products that have high market share in a rapidly growing market, are appealing, or bring revenue to a business • Cash cows – products that have high market share in a slowly growing market, are old and successful products, or bring money to support the other categories

  7. Examples • Dogs: Foster’s Beer • Question Marks: Lipton’s “Herbal Infusions” • Stars: Perrier’s bottled water • Cash Cows: Coca Cola’s “Coke”

  8. Advantages of using the boston matrix • Advantages include: • Helps a business analyse a product portfolio’s contents • By doing this it also helps that business make portfolio decisions • Can ‘map’ the strengths and weaknesses of particular products • Helps manage cash-flow

  9. Disadvantages of using the boston matrix • Disadvantages include: • Only focuses on the current state of the business and not the future opportunities/threats • Does not take into consideration external environmental factors • Does not take into consideration the fact that market share and market growth are only two factors of an attractive industry • The matrix assumes that each category is independent from the others and that they are not linked when in fact they are

  10. Conclusion • The Boston Matrix is a technique used to analyse a business’s products or product portfolios • It is divided into four categories for those products – dogs, question marks, stars, and cash cows • This matrix is used so that there is a balance of products in a business or in its portfolio in each individual category • The matrix’s main advantage is to analyse products and their success/failures • The matrix’s main disadvantage is that it only focuses on the present state of the business and not its future

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