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The Boston Consulting Group's Product Portfolio Matrix

The Boston Matrix was developed by the Boston Consulting Group and is an approach to product portfolio planning. It has two controlling aspect namely relative market share (meaning relative to the competition) and market growth.

One would look at each individual product in a range (or portfolio) and place it onto the matrix, for every product in the range, and then plot the products of the competition to get a relative market share.

 

Dogs

These are products with a low share of a low growth market.

Cash Cows

These are products with a high share of a slow growth market. Cash Cows generate more than is invested in them.

Problem Children

These are products with a low share of a high growth market. They consume resources and generate little in return. They absorb most money as you attempt to increase market share.

Stars

These are products that are in high growth markets with a relatively high share of that market. Stars tend to generate high amounts of income. Keep and build your stars.

One look s for some kind of balance within the range, trying not to have any Dogs. Cash Cows, Problem Children and Stars need to be kept in some sort of balance.


 

 

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Last modified: January 30, 2004