Product Portfolio Analysis Flashcards
(7 cards)
What is a product portfolio analysis used for
Analyse and track the development of multiple products
The product life cycle
1) - introduction - low price to increase sales, low product variation
2) - growth - price increases with popularity, new variety, business must keep up with demand
3) - maturity - lower prices to meet demand, promotion slows, less new customers,
4) - saturation - market is full, there are other alternatives, price cut to remain competitive
5) - price cuts, may discontinue product, possible extension strategy
The value of product portfolio analysis
Useful analysis tool for a business with wide product range
Useful for making decisions about where funds should be allocated
Can be used to predict future sales and therefore plan production
HOWEVER
Products and markets are complicated and my not follow a pattern
Does not provide clear solution for a business
Can be too simple
The Boston matrix
DOG
Low market share
Low market growth
Invest to revitalise product or discontinue
The Boston matrix
QUESTION MARK
In a fast growing market
Not an established product yet
Requires high investment
Lots of competition
Boston matrix
STARS
High market share
High market growth
Leading brand in a market
Boston matrix
CASH COW
High market share
Low market growth
Successful products in mature markets
Little promotion required
Generates good revenue
