The Boston Matrix

In one paragraph

A way of looking at all your products at once, plotting each by market share and market growth, to see which are paying for which.

Two axes: relative market share and market growth rate. That gives four boxes.

Stars — high share of a fast-growing market. Market leaders, and they consume cash to keep up with the growth.

Cash cows — high share of a slow-growing market. Mature, dominant, low investment need, and they generate the cash that funds everything else.

Question marks (problem children) — low share of a fast-growing market. They need heavy investment and may become stars or may not. These are the genuine decisions.

Dogs — low share of a slow-growing market. Little prospect, and they absorb management attention out of proportion to their contribution.

The point is the flow of cash

The matrix is really about funding: cows fund question marks and stars; stars become cows when their market matures; dogs are divested or dropped. A portfolio of only cows has no future, and a portfolio of only question marks has no money.

How to actually use it

• Plot your products or service lines. If one product is quietly funding three that never grow, you have found where your management time should not be going.
• Be honest about dogs. They survive because someone likes them, or because dropping them feels like failure.

Where it breaks down

• Market share is a crude proxy for competitive strength, and 'the market' can be defined narrowly enough to make anything look like a leader.
• Dogs may be worth keeping — they can complete a range, serve a valued customer, or absorb overhead.

If you are being examined on it

Say what to *do* with each category — invest, harvest, divest — and justify it. Labelling the four boxes is description, not analysis.

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