Analyse The Streingths and Weaknesses Of The Boston...

In this essay I will look at the strengths and weaknesses of using the Boston Matrix to help make decisions in business. I will first briefly explain the Boston Matrix and then analyse its effectiveness as an aid to making a marketing strategy. Like Ansoffs matrix, the Boston Matrix is a well known tool for marketing managers. It was developed by the large US consulting group and is a way that a business can compare all of its products. The two aspects it looks at are market share (relative to that of competitors) and market growth. To use it you would look at all of your products and sort them into 4 categories, stars (products with a high market growth and a high market share), cash cows (high market share in a market with little†¦show more content†¦There are several advantages and disadvantages of using the Boston Matrix to help make decisions like this... Firstly, there is a common assumption that a high market share will automatically mean high profitability of a product. This isnt always the case, as the costs of development of a product must be taken into consideration. For example, when Boeing launch a new jet, yes they have a high market share but they still must cover the extremely high development costs. Although jets are a very specialised product, it is the same for other more simple products as a large chunk of a companies resources go on design and research. Also, at the launch of a new product lots of money must be spent on advertising to ensure that the product does get the market share it wants. The good thing about this is that if this risk is undertaken, the product may in the future become a cash cow and the companies will be able to reap the benefits and the product will be able to support new products. Do you see the cycle that the products follow?, this all links very closely with the product lifecycle. Of course a company should not just assume that a product will follow this cycle, there is no guarantee that a product will follow this cycle and a marketing department would be stupid to assume that a product will. This is another problem with using the Boston Matrix to make decisions (as it is a problem with all other aspects of marketing), that markets just arent that predictable.