Boston matrix

Question 1

Boston matrix

Answer 1

A tool to position business product portfolio

Question 2

Cash cow

Answer 2

-High market share, low growth rate e.g. Dairy milk
-Generate significant cash flow
-Mature stage of product life cycle

-Little investment needed
-Milk profits and invest in newer products (question mark)

Question 3

Star

Answer 3

-High market share, high growth rate
-Strong position in a high growth market
-Net cash flow neutral, profits re-invested

-Need investment to sustain growth

Question 4

Question mark

Answer 4

-Low market share, high growth rate
-Future high profits if market share increases however success uncertain
-Neg cash flow

-investment needed, to increase MS at expense of competition-marketing

Question 5

Dog

Answer 5

-Low market share, low growth rate
-Failed product or decline stage of product life cycle
-Could be revived

-Not worth investing in
-Uses too much management, time, and resources to be justified
-Sell off

Question 6

Purpose of product portfolio

Answer 6

Gives strategy for manager to make decisions on the next step:

1. Building- investment in promotion + distribution to build sales (QM)
2. Holding- Marketing spending to maintain sales (star)
3. Milking- taking profits without much more investments (CC)
4. Divesting- selling off product (dog)