The Boston Matrix

Sorting a product range

Most businesses sell many products at once, and the Boston Matrix helps them look at the whole range together. It sorts each product using two measures: its market share, meaning how big a slice of the market it holds, and its market growth, meaning how fast that market is expanding. This gives four categories. A star has high growth and high share. A cash cow has low growth but high share, so it earns steady profit. A question mark, also called a problem child, has high growth but low share, so its future is unclear. A dog has low growth and low share. A balanced portfolio has a spread across the categories, and each one needs a different action. This module covers the categories and what to do with them.

Portfolio words

Learn these before you sort any product, and keep the two measures share and growth in mind.

Cash cow against dog

Both sit in low-growth markets, but one earns well and one does not, so a business treats them very differently.

How to place a product then act

Never jump straight to a decision. Read the two measures first. Find how big a share the product holds, then how fast its market is growing, and use those to drop it into one of the four boxes. Only then choose the action that box calls for. A high-share, high-growth product is worth backing hard, while a weak product in a flat market rarely earns its place. Name the category the numbers give, then match the action to it.

Match the category to what it is

Which category is this?

A new drink sells in a fast-growing market but has only won a small share of it so far. Which Boston Matrix category is it?

• A question mark.
• A star.
• A cash cow.
• A dog.

A balanced portfolio

Select the TWO statements that describe a healthy product portfolio.

• Cash cows can fund investment in stars
• A firm needs products across more than one category
• A firm should aim to sell only dogs
• Every single product must be a star

Count the strong earners

A company sells 12 products. Of these, 4 are cash cows and 3 are stars. Add these two groups to find how many products are either cash cows or stars.

Order a product journey

Put the typical Boston Matrix journey of a successful product in order, earliest first.

• It launches as a question mark, high growth but low share
• It wins share and becomes a star
• Its market matures and it becomes a cash cow
• In time it may slip to a dog

Complete the facts

The whole range of products a business sells is its product _____. The Boston Matrix sorts them by market _____ and market growth. A product with low growth but high share that earns steady profit is a cash _____. A product with low growth and low share is a _____.

Match the category to its action

Spot the true portfolio facts

Tap the TWO statements that are true about the Boston Matrix.

• It sorts products by market share and market growth
• A cash cow has high share in a low-growth market
• A star has low share and low growth
• A healthy firm sells products in only one category

Classify and act

Read each case and choose the best response, with a reason.

• A product has a big share of a market that has stopped growing, and it earns reliable profit. How should the firm treat it?
• A product has almost no share of a market that is barely growing and earns very little. What is it, and what fits?
• A student just labels each product without saying what the firm should do. How could the answer be improved?

Analyse the product portfolio

A snack company has one product with a big share of a flat market, one with a small share of a fast-growing market, and one selling poorly in a flat market. Analyse its portfolio using the Boston Matrix.

• Explain what the Boston Matrix measures
• Classify each of the three products into a category
• Recommend the action for the cash cow and the question mark
• Recommend what to do with the dog
• Finish with a judgement on whether the portfolio is balanced and why