The product portfolio and the Boston matrix Edexcel International GCSE Business revision
Not started
Learn it
In plain words
Most businesses sell more than one product. The full set is the product portfolio. Some are earning good money, some are growing, some are fading.
The Boston matrix sorts each product into one of four boxes, by two questions: how big is its share of the market, and how fast is that market growing?
5 things to know
- A star has a high market share in a fast-growing market. It needs investment to keep its position, and should become a cash cow.
- A cash cow has a high market share in a slow-growing market. It brings in a lot of cash and needs little spent on it.
- A question mark (or problem child) has a low market share in a fast-growing market. It needs heavy investment, and may or may not succeed.
- A dog has a low market share in a slow-growing market. It earns little and may be dropped.
- A balanced portfolio uses the cash from cash cows to pay for the stars and question marks that will earn tomorrow's profit.
Tips and tricks
- Learn the two axes: market share and market growth. Every question on the matrix comes back to which box a product is in.
- Cash cows are the money-makers today, not the stars. Stars cost a lot to support.
It lands in your notebook with its questions as flashcards.
The product portfolio and the Boston matrix: 5 questions and answers
These are the quiz’s questions. Do the quiz first, then come back here for the ones that got you.
Which product has a high market share in a high-growth market?
High share and high growth make a star.
Which type of product provides cash to fund the others?
It earns a lot and needs little investment.
A product has a low market share in a market that is hardly growing. It is
Low share and low growth: it may be withdrawn.
What are the two measures used in the Boston matrix?
Each product is placed by its share of the market and the market's rate of growth.
What is a product portfolio?
It is the whole collection of products.
Quiz
5 questions
Tap an answer and you’ll see straight away whether it’s right, and why.
Worksheet
3 questions, 8 marks. Write your answers on paper, then check them.
The product portfolio and the Boston matrix
Edexcel International GCSE Business 4BS1 · 8 marks · papermunch.org
Name ______________________________ Date ______________
Describe a "cash cow" in the Boston matrix.[2]
Show answerHide answer
A product with a high market share in a market that is growing slowly. It generates a lot of cash and needs little investment.
A new product has a small share of a fast-growing market. Identify its position in the Boston matrix and explain what the business should consider.[3]
Show answerHide answer
It is a question mark. The business must decide whether to invest heavily to build its market share, which could turn it into a star, or to drop it if success looks unlikely.
Explain why a business should aim for a balanced product portfolio.[3]
Show answerHide answer
Cash from established products pays for the development and promotion of newer ones. When older products decline, the newer ones are ready to replace them.
Answers: The product portfolio and the Boston matrix
- 1. A product with a high market share in a market that is growing slowly. It generates a lot of cash and needs little investment.
- 2. It is a question mark. The business must decide whether to invest heavily to build its market share, which could turn it into a star, or to drop it if success looks unlikely.
- 3. Cash from established products pays for the development and promotion of newer ones. When older products decline, the newer ones are ready to replace them.