An informal marketing tool to analyze and manage product portfolios.
1. Draw the matrix (see front) and define your product.
2. Identify your market share.
3. Identify the speed of market growth.
4. Based on your findings, place it on the matrix.
I. Dogs – low share and low growth
Tend to absorb cash and are developing in a slow growing industry. To do: harvest or identify profit rich markets and focus on these.
II. Cash Cows – high share, slow growing market
They generate cash in excess but investment possibilities are limited. To do: milk them as long as possible, hold to remain sales, defend position, invest in new production development (NPD).
III. Question marks – low shares, fast growing
Products grow fast, consume a lot of resources and generate low cash but have potential to grow as cash cows, stars or dogs (if wrong investment).
To do: invest selectively and focus on profit rich markets.
IV. Stars – ideal combination of growth & share
Increase sales or market share. Invest to maintain.
You want to do an investment and grow.
Helps to identify where to invest in order to maximise profit.
Have a product in the market.
Definition of your growth strategy.
Depending on your outcome - change and adjust your strategy.