Boston Matrix

- Quick introduction and company example -

Boston Matrix

developed in early 1970s by Boston Consulting Group

Tool for decision making process in which product/business to invest

Key factors are: MARKET SHARE MARKET GROWTH

Shows where to apply other resources, people, time and equipment

Boston Matrix

Boston Matrix

DOGS: market share low & market growth low smaller TV manufacturer

CASH COWS: market share high & market growth low Samsung TVs

QUESTION MARKS: („problem child“): market share low & market growth high Nokia / Alcatel new market entry next year

STARS: market share high & market growth highSamsung (Smartphone)

Boston Matrix

Possible development: Question marks > Stars > Cash cows

-> high potential to make money

Boston Matrix

Example Apple:

Step 1 (plot opportunities): • Ipod• Iphone• Ipad• Iwatch

Boston Matrix

Step 2 (classify into the four categories): • Ipod (1st generation): Dog• Iphone: Stars • Ipad: Cash cows• Iwatch: Question marks

Boston Matrix

Step 3 (what to do with each product?)• Ipod (dog): Strategy „DIVEST“ (get rid of it)• Iphone (stars): Strategy „HOLD“ (maintain)• Ipad (cash cows): Strategy „HARVEST“ (reduce

investment)• Iwatch (?): Strategy „Built market share“

(further investments i.e. advertisement)

Boston Matrix

PROS: Easy to applyEasy to understand

CONS:Flat analysis List all products