KEY TAKEAWAYS

To analyse where to invest or divest

 
 
2 by 2 matrix: growth-share matrix
 
 Asses a company's current product portofolio based on the
product life cycle and the experience curve
 Product life cycle: MKT growth
 Experience curve: MKT share

Dogs:
 Low relative market share in a slow
growing mature market.
 Products mostly do not generate profit and may
usually just break even.
 Divest, as these products have a negative effect on
the overall profitability of the company.
Question Marks:
 Low relative market share in a relative young
but promising market (growing).
 Potential of becoming stars if market share can
be increased.
  If necessary market share is not reached, likely to
turn into a poor dog, as soon as the market gets
more mature.
 Careful analyses are needed to determine if to invest
or not.
Cash Cows:
 High market share in a slowly growing/
mature market.
 Creates the highest cash flow.
 No further investment due to limited/ no growth
potential, but trying to “milk” as long as possible.
Stars:
 High market share in a promising market.
 To turn a star into a future cash cow, heavy
investment is needed to fight competition and
expand market share.