The curve above represents the life cycle of a product starting from the initial stages up to the decline. For each stage the trend of the economic commitment necessary to support the project is represented . It is evident that once the maturity of the product is reached (Cash Cow stage) the maximum performance and remuneration of the project is obtained. It is also evident that when you are in the Question Mark stage, large investments are important to gain market space.
How to Use the Boston Matrix for Business Strategy:
Here are some tips on how to intervene vk database based on the positioning obtained by the company or product you are analyzing.
- Resource Allocation:
- Focus investments on stars to maintain their growth.
- Optimize the yield of your milking cows by taking advantage of the cash flows generated.
- Carefully evaluate the questions and decide whether to invest to make them become stars or divest if they are not promising.
- Consider retiring the dogs or, if possible, trying to repurpose them into more promising products.
- Strategy Development:
- For stars, adopt growth strategies, such as launching new features or geographic expansion.
- For cash cows, maintain market available social commerce channels position and maximize profits.
- For dogs, carefully evaluate sustainability and consider decommissioning or repurposing options.
Boston Matrix Example
As an example, let’s assume we want to compare our company with some competitors that operate in the same market. For example, we can decide to get an idea of the size of the market in which they operate by collecting the turnover of all lack data companies in the last few years (in the example, data is collected for only 2 years) and calculate their respective market shares and growth rates.
The total market value in 2023 is equivalent to 2,808,000 Euros while the average market growth is +23%, which means that it is a rapidly expanding market. Now that we have the we can distribute our companies on the Boston matrix and we will get the following.
