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Boston Matrix

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Submitted By Ying2012
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NGFL WALES BUSINESS STUDIES A LEVEL
RESOURCES.

2008 Spec. Issue 1 Sept. 2008

Page 1

Boston Matrix structure can be used as a guide to product mix management.

Specification requirement— Understanding of the Nature, Importance and Implications of the Boston Matrix.

Product Types according to the Boston Matrix.

Managing the Product Portfolio
As we have seen every product has a life cycle, that is a period of time for which it appeals to the consumer. Within this life cycle there are five stages.

Introduction.

Growth.

Maturity.

Saturation

Decline.

High Market Share - Slow Market Growth—Cash
Cows.
Here we have a mature market which is growing slowly, new competitors are few and far between.
Cash Cows are very profitable products, expenditure on such things as advertising is relatively low, customers know and understand the product, brand value has been established. It is also likely that development costs have already been recouped, increasing profitability further. Firms should aim to have successful products in mature market places, these products are known as cash cows. Examples of such products would be Ford Transit Vans, Kellogg's Corn Flakes,
Coca Cola. A More recent example would be the Wii, which has established itself as the games consol for non gamers.

It is very unlikely that companies market a single product, it is much more probable that firms market a range or a number of ranges of products. This means that managing the product portfolio can be a complex task.
There are three main tools that can be used in managing the product mix .These are;

Product Portfolio (Life
Cycle) Analysis.

The Boston Matrix.

The Ansoff Matrix.

High Market Share—Fast Market Growth—Stars
The market is immature, with new customers being attracted to the marketplace and new competitors being tempted by

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