Boston Consulting Group Matrix

Question 1

What is the Boston consulting group matrix tool?

Answer 1

• Marketing planning tool for product portfolio analysis, looks at market growth and market share to assess the market potential for new and existing products

Question 2

What are dog products?

Answer 2

Generates little revenue as markets are declining, product should be dropped or discontinued (End of product life cycle)

Question 3

What are question mark products?

Answer 3

• Product has low market share but in fast growing market
• High potential but requires substantial investment to develop into stars
• Generate low revenue but has high investment expenses
• Needs managers to decide which products to build and which products to divest

Question 4

What are star products?

Answer 4

• Successful products that generate large revenue
• Requires large investment to develop and promote in order to harvest most profits and to keep up with fast growing market
• Becomes cash cows as market growth slows down

Question 5

What are cash cow products?

Answer 5

• Mature and established products
• Generate strong revenue and profits but requires minimal investment
• Used to maintain stars and grow question marks from sales revenue

Question 6

What are uses of the BCG matrix?

Answer 6

• Identifies need to rebalance portfolio
• Dynamic model as products can change categories

Question 7

What are limitations of the BCG matrix?

Answer 7

• High market share doesn’t always lead to profits
• Doesn’t identify causes or product positions
• Should be used with other planning tools.