2. The Boston Matrix IB Business and Management

3. What is the Boston Matrix? It is a tool created by the Boston Consultancy Group It is designed to be used by multi-product firms It is used to analyse a firm’s product portfolio and help to devise marketing strategies

4. The Boston Matrix The Boston Matrix allows a firm to analyse its product portfolio by their market growth and market share in relation to their competitors Products are categorised as either a: Problem Child/Question Mark Star/Rising Star Cash Cow Dog

5. Market Share Market GrowthMarket Growth HighHigh LowLow HighLow CASH COW STARProblem Child DOG

6. Problem Child Question marks have a low share of a high growth market Also known as Question Marks Are often new products The firm may decide to BUILD on existing sales by investing more in promotion and distribution

7. Stars Stars have a high market share of a high growth market Also called rising stars The firm may wish to use a HOLDING strategy whereby it maintains current levels of spending to keep the product in this category

8. Cash Cows Cash Cows have a high market share of a low growth market These are well established products Little or no investment is required Companies may wish to adopt a MILKING strategy whereby they use profits to support other products

9. Dogs Dogs have a low market share of a low growth market Companies do not want to have many products in the ‘dog’ category Firms may invest in dogs or may DIVEST which means withdrawing from the market

10. Task – Look at the incomplete diagrams of the Boston Matrix. What category should go in each cell?

11. Market Growth Market ShareMarket Share HighHigh LowLow HighLow

12. Market Share Market GrowthMarket Growth HighHigh LowLow High Low

13. Where do you think that these products made by Deagio would fit on the Boston Matrix?