boston matrix
DESCRIPTION
Boston Matrix. Sharon Wu . What is Boston Matrix. It is a portfolio planning model developed by Bruce H enderson of the Boston Consulting Group in the early 1970’s. The collection of businesses or products that make up a business. Function. - PowerPoint PPT PresentationTRANSCRIPT
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Boston Matrix
Sharon Wu
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What is Boston Matrix• It is a portfolio planning model developed by Bruce Henderson of the Boston Consulting Group in the early 1970’s. • The collection of businesses or products that make up a business
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Function• Balance portfolio with some products in each category• It is used in market to classify the types ofproducts present in any company according to market share and market growth.
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General summary1. Star
• High market growth
• High market share
• Cash neutral
• Hold
2. Problem child
• High market growth • Low market share
• Cash absorbing
• Build
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3. Cash cow
• Low market growth
• High market share
• Cash generating
• Harvest or milk
4. dog
• Low market growth • Low market share
• Cash neutral
• divest
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Chart
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1. starDetails:
• High share of a rapidly growing market• Position of leadership in a high growth market• Net cash inflow is neutral or at best modest• The business is relatively strong and the market is growing
Examples: Estee Lauder ( advanced night repair ) ; some alcoholic drink
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2. Cash Cow• High share of a slowly growing market• Mature stage in the product life cycle• Mature, success product• Dominant share• Little potential for growth
Examples: tube material PA14D polypropylene; iphone
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3. dogs• Unattractive• Low share of a slowly growth market• Not going anywhere• Not real potential • Products are in the decline phase of their life cycle
Examples: V998; Nokia
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4. Problem child products• Low share of a rapidly growing market• Cash flow is negative• Has potential but the future is uncertain• Could become either a star or a dog
Examples: diamond
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Advantages & disadvantages
• It is only a snapshot of the current position • Does not take account of environmental factors• Good for analysing product portfolio decisions