A business with a range of products has a portfolio of products. However, owning a product portfolio poses a problem for a business. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.
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:
How the Boston Matrix is Constructed
The Boston Matrix makes a series of key assumptions:
How does the Boston Matrix work? The four categories can be described as follows:
Ideally a business would prefer products in all categories (apart from Dogs!) to give it a balanced portfolio of products.
The main values of using the Boston Matrix include:
However, the model can be criticised in several ways: