A business with a range of products has a PRODUCT PORTFOLIO. However, owning a product portfolio often poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio. Which products should it focus on?
A portfolio of products can be analysed using the Boston Group Consulting Matrix. This categorises the products into one of four different areas, based on:
Market share – does the product being sold have a low or high market share?
Market growth – are the numbers of potential customers in the market growing or not
How does the Boston Matrix work? The four categories can be described as follows:
Stars are high growth products competing in markets where they are…