Boston Matrix

Understanding The Boston Matrix.

 Introduction
1. What is the Boston Matrix?
● A method of studying products, based or
assessed on market share and market growth:
○ Market share - The product’s market
share compared to its competitor
products, which provides a measure of
cash generation.
○ Market growth - how much the
market itself is growing, which gives
a measure of cash usage.
2. Why is it used in Business?
● The Boston Matrix is also known as the
Product Portfolio Matrix. It is designed to
help companies work out which of their
products are worth attention, which should
be stopped, and what strategies to use to
improve sales.
● The Boston Matrix was developed by
consultants at the Boston Consulting Group
in the 1970s.
 The Boston Matrix
HIGH

Question Marks Stars

Investment needed High in market
to convert it into a share and growth.
Low market share.
successful product. Have the potential
At risk of Is very profitable. for more growth.
GROWTH
MARKET

becoming a dog
product.

Generate a steady
Low market share flow of income.
and growth.
Avoid Investment. Mature Products
To be replaced or
Not likely to
LOW

discontinued.
Dogs increase in growth. Cash Cows
LOW MARKET SHARE HIGH

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 The Boston Matrix with Example.
Brand : Hermès
Star Product - Hermès Scarf & Coffee/Tea Cups
❏ This product has been endorsed and used by
influencers and celebrities. Thus, the popularity is
still growing, as a result sales are steadily
increasing.
❏ The designs are new, modified, eccent ric, and
changing per season.
Question Mark Product - Hermès Constance Belt
❏ Has potential to become a staple, and still has
presence in market and fashion scene.
❏ Could use investment to make it diverse in colours,
sizes, or materials.
Cash Cow Product - Hermès Birkin Bag
❏ This product been in the market since 1984 and is
one of the staples of the brand.
❏ This product still generate a stable amount of
income to the brand without increasing or
decreasing. Therefore not likely to show any
growth.
Dog Product - Hermès Cape Cod Watch
❏ Mostly died out of trend is not worn anymore by
buyers.
❏ The style of the watch was criticised and not
rational, mostly likely to replaced or discontinued
with another product.