Boston Matrix - Classifying Products and Business Units
The Boston Matrix consists of two axes (market growth and market share) that are split between high and low. The resulting four quadrants form the categories by which an organization can classify its business units or products.
 |
The four categories are given the following names:
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.
Dogs - are products that represent a cash drain and are near the end of their product life cycle.
Most organizations expect their products to begin life as a Question Mark, later becoming a Star and then a Cash Cow as the market matures. Finally, the product becomes a Dog as the market declines.
There is no inevitability about this and some products are Stars from the moment of launch, whereas others become Dogs almost immediately.
 |
For example, the increasing pace of technological change means that many products never have the time to achieve Cash Cow status before obsolescence turns them into a Dog.
|
|
 |
You may also be interested in: Introduction to the Boston Matrix, Classifying Products and Business Units, Stars, Question Marks, Cash Cows, Dogs, Using the Boston Matrix at Brand Level, A Balanced Portfolio and Advantages and Disadvantages.
