The Boston Matrix
Focusing Effort to Give the Greatest Returns

The Boston Matrix is a simple and highly visual way to examine the likely financial performance of your products, services or business portfolio. It can help you to decide what to promote or invest in.

When you use the matrix, you place products into four categories - Dogs, Cash Cows, Stars, Question Marks (Problem Children) - and adjust their final position based on their market share and market growth.

Dogs
These are business units or products with a small market share in a low-growth market. They don't make much profit, but also require little investment from you.

Cash Cows
These well-established products or services are popular with customers, making it easier for you to exploit new opportunities within related segments. But, with these markets growing slowly, good opportunities will likely be few and far between.

Stars
Your businesses and products in this segment are growing rapidly, providing a decent level of revenue and some good business opportunities.

Question Marks (Problem Children)
These are opportunities that you don't really know how to handle. They don't bring in much revenue now, but they're in high-growth markets, so they could - with time, investment and effort - become Stars.

Assess Your Options
Once you've placed each business product within the matrix, you can assess what to do with it.

You could then use investment to build market share, keep the status quo, reduce investment and harvest profits, or sell your Dogs and reinvest in Stars.

The Limitations
The matrix only looks at market share and market growth to determine profitability, and doesn't try to address other factors.

Also, a high market share doesn't necessarily mean that you'll see higher profits.


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