The Boston Matrix-Study One-Topic 6

The Boston Matrix

• What is the Boston Matrix?

It is the growth market share matrix. the companies products are divided into four categories based on their market growth rate and their importance of the relative market share and dominance.

• What is meant by a dog, a star and a cash cow?

Dog-have a small share of a low growth market. They are businesses that offer specialised products in limited markets that are not likely to grow quickly. Dogs serve only a limited market and therefore the products or business may be taken off the market or sold.

Star-Products that have a dominant market share in a high growth markets.Stars generate large revenues but they also required large amounts of funding to keep up with production and promotion demands.

Cash Cow-Have a dominant market share in a low growth potential market. Competitors do not often enter the market. Is well established and has a high market share that a company can sustain with minimal funding. Companies usually milk Cash Cows to fund other products for growth.

• How can you use the Boston Matrix to identify changes needed to current business operations? 

You can determine a companies existing successful or unsuccessful products or SBU's. from this you will be able to determine what actions you will take. Weather you nurture a less successful product, or simply cut your loses. It is a great simple tool to use when preparing a marketing plan, however it really is a guide and not to be used as a final decision maker.