3.135 - Boston Matrix

Question 1

What is the Boston Matrix?

Answer 1

Analyses all of a firm’s products in terms of their market share and the growth of the market

Question 2

What are the elements of the Boston Matrix?

Answer 2

Question Marks/Problem with children
Stars
Dogs
Cash Cows

Question 3

What is Question Marks/Problems with Children?

Answer 3

Products that are in fast growth markets but are not yet established and only have a relatively small market share

Question 4

What are Stars?

Answer 4

Products that are in fast growth markets and are doing well in terms of market share

Question 5

What are Dogs?

Answer 5

Products with a relatively low share of the slow growth market

Question 6

What are Cash Cows?

Answer 6

Products are well established and so have a relatively high market share
However, the market they are in is growing slowly

Question 7

What are the advantages of the Boston Matrix?

Answer 7

Helpful for managers to evaluate balance in the business current product portfolio
Model is simple and easy to understand
Provides a base for management to decide and prepare for future actions

Question 8

What are the disadvantages of the Boston Matrix?

Answer 8

High market share is not the only success factor - doesn’t lead to profit all of the time
Market Growth is not the only indicator for attractiveness of the market
Sometimes Dogs can earn even more cash than cash cows
Problems of getting data on market share and growth
Business with low market share can make high profits too