The Boston Consulting Group (BCG) Matrix
- The Boston Matrix is a tool used by businesses to analyse their product portfolio and make strategic decisions about each product
- The matrix classifies products into four categories based on their market share and the market growth rate
- Cash Cow
- Problem Child/Question Mark
- Star
- Dog
Diagram Explaining the Boston Consulting Matrix
The classification of products in the Boston Matrix according to their market share and the growth rate in the market as a whole
- By categorising products into these categories, businesses can allocate resources more effectively, optimising their cash flow and developing marketing strategies that align with the product's potential
The Implications of Product Classification in the Boston Matrix for the cash flow and Marketing Strategy
Product Type |
Explanation |
Implications |
Cash Cow |
|
|
Problem Child/Question Mark |
|
|
Star |
|
|
Dog |
|
|
Exam Tip
In paper 2 you may be asked to apply the BCG matrix to a given product portfolio.
To achieve full marks you will need to demonstrate both knowledge and application skills.
- To demonstrate knowledge draw the matrix ensuring that both the axes and headings are accurately labelled
- Application is demonstrated through the correct placement of products within the four quadrants and by explaining why you have chosen to place individual products in each quadrant
- Refer to each product's relative market share and the rate of market growth
- Look for clues in the stimulus material to help you with this.