How to use The Boston Box or Growth-Share Matrix
The Boston Box
The Boston Box or Growth Share Matrix, is a technique that can be used to classify a product range. The Boston Box is thus a tool for analyzing the internal environment, since it is focused on the product lifecycle of the internal product portfolio. The model is displayed below:
The Boston box has two axes, considering the market growth rate in the vertical direction and the market share in the horizontal direction. This results in four types of products, namely:
- Stars
- Cash Cows
- Wild Cats and
- Dogs
Wild Cats
A successful product starts as a Wild Cat (or problem child) and goes clockwise round the model until it dies or is revitalized as a new product or service. They are unprofitable but are investments for the future.
Stars
Stars strengthen their position in a growth industry until they become big profit earners. They have a high market share in a market that is growing.
Cash Cows
Cash cows are mature products or services, in markets with little or no growth. Stars and cash cows provide funding for the other segments of the matrix. Cash cows are characterized by a high market share in a slowly growing market.
Dogs
Dogs have low market share in markets with low growth. They are often in areas that are removed or allowed to wither away.
How to use the Boston Box
The boston box is a useful tool for analyzing the current product portfolio. Plotting the services on the matrix provides insight into which products are in which stages. This, together with other forms of analysis, can be used as a starting point to guide product development.
Practice the BCS Foundation Certificate in Business Analysis
Over here you can practice for the BCS exam. A free practice exam is available, and for less then $10,- you buy two full practice exams with 80 questions.
