The Boston Matrix is a tool used to analyze a company's portfolio of products based on their relative market share and market growth rate. It sorts products into four categories: stars, cash cows, problem children, and dogs. Stars are high market share products in high growth markets. Cash cows have high market share but are in low growth markets. Problem children have low market share but are in high growth markets. Dogs have low market share and are in low growth markets. The matrix is used to help decide where to allocate resources and determine strategies for each type of product.

1. Boston Matrix
Problem Child

2. Learning Objectives
• the four phases of the life cycle, extension
strategies, cash flow and the life cycle, and
product portfolio analysis through the Boston
Matrix

3. The Boston Matrix
• The Boston matrix is a tool for making assessment
decisions for existing products in terms of their
market performance and their potential.
• It allows for a range strategic action to be
considered for each category.
High Low
Market
Growth High
Rate
Low
Relative Market Share

4. Why is it important for business to have
a balanced portfolio of products?

5. Within a portfolio,
products can be categorised based
on their growth rate and their
market share

6. Problem Child
• Products that have low
market share in a high-
growth market. They
needs lots of money spent
on them if they are going
to be successful. They are
frustrating because they
have potential but no body
seems to want them.

7. Stars
Products with high
market share in a high
growth market. They
generate lots of sales but
needs lots of money on
them to keep up with the
growing market.

8. Cash Cows
• Products with high market
share in a low growth
market. They generate lots
of sales and large profits.
They money they make can
be spent on problem
children or rising stars.

9. Dogs
• Products with low market
share and low growth.
Businesses want as few
of them as possible and
may keep them in their
portfolio just to keep
customers happy.

10. TASK: Using the .ppt slides draw
the Boston Matrix
High market Low market
share % share %
High Rising Star Problem Child
market
growth %
Where would you place a DOG, a CASH COW, a
RISING STAR and a PROBLEM CHILD
Cash Cow Dog
Low
market
growth
%
Slide 10

11. Boston Matrix – Product Portfolio
Analysis
High market Low market
share % share %
High Rising Star Problem Child
market Excellent products Big investment to
growth % with high growth and develop and advertise
high market share; but to start with but it has
need constant big sales potential for
advertising. the future.
Cash Cow Dog
Profits from Cash Cows Sales are falling and it
help fund new may be taking profit to
Low products. Sales made keep the dog alive.
market with little investment.
growth
%
Slide 11

12. Problems with the Boston Matrix

13. The Boston Matrix
Use a sentence to describe
each of the 4 categories of the
Boston Matrix.
CASH COW
STAR
PROBLEM CHILD
DOG
Use p240-242 to help you

14. Mars Inc
• Why do Mars Inc sell so many
brands and products?

15. Every business will have these
product categories
• HMV
• ODEAN
• EASY Jet
• McDONALDS
For some businesses they have a range and
within the range they have the categories
• RYMAN

16. Product Life Cycle – BMW 3 Series
Maturity & Saturation / Cash Cow
Decline / Dog
Growth / Rising Star
Sales
Introduction / Problem Child
Why do BMW
keep releasing
another 3 series?
1975-82 1982-1990 1990-1998 1998-2006 2006 -> Slide 16

17. • HOMEWORK
• A-Z GCSE Worksheets:
Product portfolio