Book Description - ISBN 978-1-62620-952-7 (30 Pages)
This free eBook describes the Boston Matrix, an approach to product portfolio planning based on relative market share and market growth.
Chapter 1 - What is the Boston Matrix?
The Boston Matrix is used to allocate resources depending on how a product or service is positioned in the market. It can be used to analyze business units, product lines, and services.
Chapter 2 - How do I classify products and business units?
Products and business units can be classified as either Stars (tend to be relatively new, have a high market share, and be more or less self-financing), Question Marks (require substantial amounts of cash to try to attain or regain dominance in its growth market), Cash Cows (are a market leader in a stable market that has little potential growth. They generate significantly more cash than is needed to sustain the product), or Dogs (are products that represent a cash drain and are near the end of their product life cycle).
Chapter 3 - What are Stars within the Boston Matrix?
These are products with a substantial share of a fast-growing market. An organization will usually consider it worthwhile to invest in retaining and growing a star's strong market share because the revenue it brings in equals or exceeds the investment required.
Chapter 4 - What are Question Marks within the Boston Matrix?
A Question Mark has a low market share in a fast-growing market. Whilst this type of product is likely to generate some revenue it may not be enough to sustain rapid growth and it may become a net consumer of cash as it struggles to retain its market share.
Chapter 5 - What are Cash Cows within the Boston Matrix?
Successful products or services in mature markets are referred to as Cash Cows. They have high sales revenue, profitability, and market share.
Chapter 6 - What are Dogs within the Boston Matrix?
Dogs are found in slow-growing or shrinking mature markets and their market share is low. Any revenue they generate is just enough to sustain this low market share and from the organizational perspective they represent a drain on its resources because even though they may be 'breaking even' financially, they are using assets (people and capital) that could be better used to support a Question Mark or Star.
Chapter 7 - Can I use the Boston Matrix at brand level?
The Boston Matrix can help to optimize the distribution of funds across business units or product ranges. It is often used at the brand level, although it was never designed to be.
Chapter 8 - What is a balanced portfolio within the Boston Matrix?
A balanced product portfolio has Cash Cows that can provide the investment funds to develop Question Marks and Stars. Once a balanced portfolio has been defined, there are four strategies that can be followed: Hold, Build, Harvest, or Divest. A balanced portfolio does NOT mean having equal numbers of products or services in each quadrant.
Chapter 9 - What are the advantages and disadvantages of the Boston Matrix?
Any organization using the Boston Matrix to help define its strategy, rather than just provide an indication of future potential, must properly represent the cash flow of each business unit or product being assessed. There has been a tendency for users to oversimplify the analysis and to focus on categorizing products or business units as Cash Cows, Stars, Question Marks, or Dogs, rather than considering cash flow.
Using the Boston Matrix - The Boston Matrix was developed to help organizations allocate their investments across its product range and divisions. However, it is sometimes used as part of brand level decision-making - something it was never designed for. Many of the misconceptions associated with the Boston matrix come from the nature of the economic climate that existed at the time of its inception. These fundamental assumptions were incorporated into its design and are not always applicable in today's global fast-paced market.
|You will learn:|
Gives a Lot of Good Reasons Not to Use the Boston Matrix
I read this book because I'm fed up of people using Boston Matrix categories to support their point of view about products in our marketing meetings when I don't think it is an appropriate model for this. I was intrigued by the blurb which states 'Why this tool is so controversial and why it has been removed from many marketing courses' and 'Why it can be dangerous to use this tool at brand level'.
I'm please to say that the book comes over very strongly in pointing out that the Boston Matrix has some serious limitations (which are widely recognized by it's originators) and needs to be used with caution. All I need to do now is persuade some of my colleagues to read it and then they might not be so willing to glibly categorize our products as 'Cash Cows', 'Stars' or 'Dogs' and to do some real strategy planning instead. Well, I can always hope.
Useful for Anyone Involved in Marketing
This book is categorized as a 'Strategy Skills' book on the website, which is debatable as it is most often used in marketing - maybe they'll move it if they add a marketing skills category. I thought the book described the purpose and rationale of this technique very well and made no bones about the fact that the Boston Matrix is 'abused' as often (or more often) than it is used properly.
If you are going to use this method then being aware of its limitations can save you from making some very poor decisions. For a free book I thought it was great value for money - seriously though, it does tell you everything you need to know and is professionally written by people who know what they are talking about when it comes to marketing in the real-world.
A Comprehensive Explanation of the Boston Matrix
This is a comprehensive explanation of this rather old analysis technique which just refuses to die.
A Step-by-Step Guide to the Boston Matrix
I was assigned to do a research paper on the Boston Matrix and had no idea where to begin. Until that assignment I had never even heard of it. I searched the internet for books about it when I came across this book. I was not sure if this was the best book for me to read since I needed to have a thorough understanding of this topic after reading this book. This book seemed too short to deliver what I needed, but I gave it a chance and went for it. After reading the entire book in less than 30 minutes, I was completely able to write my research paper which earned me an amazing grade.
The book starts in the beginning by really breaking down what the Boston Matrix is. It gives a step by step guide as to what the Boston Matrix is, how to set it up, and how to use it. This book delivered exactly what I needed, as being a beginner when it comes to the Boston Matrix.
This book goes in depth to define what market share and market growth is. It also goes on to explain what the four main categories are: Stars, Question Marks, Cash Cows, and Dogs. Before this book I had never even heard of these terms and 30 minutes later I feel pretty well versed. Throughout the book it also gives examples as to what the four categories are by using brands and ideas that I could understand, Not only does it explain the benefits of using the Boston Matrix, but it also explains the disadvantages of using it as well. I learned that many people misuse this analysis tool.
Overall, I would highly recommend this book to others that are in similar situations that I was in. I told my fellow classmates about this book and they too were able to read it and retain the information in a short amount of time.
SWOT Analysis: A Quick and Easy Way to Assess your Competition - Do you know how you stand when compared to the competition? If not, you need a quick and easy way to analyze your competition. The SWOT analysis is the ideal tool as it quickly and easily identifies Strengths, Weaknesses, Opportunities and Threats (SWOT).
Using the SWOT Analysis - As a manager, your role in any strategic planning is likely to involve providing operational data to help assess the internal capabilities, and (depending on your job function) you may also be asked to provide market intelligence. The completion of a SWOT analysis should help you to decide which market segments offer you the best opportunities for success and profitable growth over the life cycle of your product or service.