11B : The Boston matrix

Question 1

What is the Boston matrix
(Boston market group)

Answer 1

Is a method used to manage the range of all the different types of products a company sells (there are your groups)

Question 2

What is the problem child stage?

Answer 2

Product with small market share & high marke growth
- could succeed but also could fail
- are not profitable yet
- Must be Monitored closely

Question 3

What is the rising star stage?

Answer 3

Has high market growth & high market share

• starting to pay back on investments
• Needs careful management and marketing strategy
• Established and growing market

Question 4

What is the cash cow stage?

Answer 4

Has high market share but low market growth

• Produced in large quantities highly profitable
• stable cash flow
• costs of production are usually low because of economies of scale

Question 5

What is the dog stage?

Answer 5

Has low market share and low market growth

• shrinking market share
• falling profitability
• usually sold of to other companies

Question 6

What are the advantages of the Boston matrix

Question 7

What are the advantages of the Boston matrix (Boston market group )

Answer 7

• Shows companies market share for their products

• cash cows: high sales generate cash

• problem child: could provide a lot of revenue in the future
(Probably the most difficult to manage)

Question 8

What are the disadvantages of the Boston matrix ?
(Boston marketing group)

Answer 8

• The Boston matrix can cause firms to focus too much on increasing market share

• it is over simplified :it breaks down business dynamics into only two factors market growth and market share. Things like competition and profitability need to also be considered

• is just a geralisation. Cash cows can lose money und dogs can be profitable in the right circumstances

Question 9

Define what product portfolio is

Answer 9

Is the mix of products the business produces
It is good to have because:

• it spreads fixed costs
• allows greater economies of scale
• allows the targeting of wider markets

Question 10

What’s product breadth

Answer 10

Is the number of product lines a business produces.
E.g. Procter & gamble have over 20 brands

Question 11

What is product depth?

Answer 11

Is the number of varieties within each branded product

(e.g.Duracell bat series come in different sizes and pay sizes)