3.4c Product - Boston Matrix Flashcards Preview

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Flashcards in 3.4c Product - Boston Matrix Deck (12):
1

Product portfolio definition

Range of products or brands provided by a business

2

Boston matrix definition

Tool of portfolio analysis that classifies products according to the market share of the product and the rate of growth of the market
(See diagram)

3

Four categories in Boston Matrix

- Stars
- Question marks
- Cash cows
- Dogs

4

Stars features

- High share of a rapidly growing market
- Requires high marketing spending
- Net cash flow is neutral or at best modestly positive

5

Strategy for stars

- Invest to sustain growth
- Build sales
- Spend to keep competitors at bay

6

Cash cows features

- High share of a slowly growing market
- Mature stage of product life cycle
- Dominant share but little potential for growth
- Large positive cash flow - can support other products

7

Strategy for cash cows

- Defend market share
- Aim for short term profits
- Little need for investments
- Use profits from cash cows to invest in new products

8

Question marks features

- Low share of a rapidly growing market
- Cash flow is negative
- Has potential but future is uncertain

9

Strategy for question marks

- Invest to increase market share
- Invest in promotion
- Build selectively

10

Dogs features

- Low share of a slowly growing market
- No potential
- Either products that have failed or products in decline stage

11

Strategy for dogs

- Phase out or sell off
- Not worth investing in
- Any profit made reinvested just to maintain market share

12

Disadvantages of Boston Matrix

- Only a snapshot of the current position
- Has little predictive value
- Product life cycle varies

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