With the help of the Boston Consulting Group matrix, the managing director of the company wants to review the portfolio and develop sustainable strategies. We’ll use a fictional company: Bob’s Butchers. The capital contained in these products is extracted again in order to have more liquid funds. Companies must pursue a divestment strategy when the product can sustain itself no longer. As a result, products like these are barely self-sustaining. The relative market share is also low: compared to the market leaders, hardly any sales are generated with these products. Market growth is low, stable, or even declining. “Poor dogs” are products or services that a company is phasing out. On the contrary: Products found in the cash cow area of the portfolio matrix generate the financial means that are invested in question marks or stars. They generate a very high and steady cash flow even without any investments. Products or services known as “(dairy) cows“ also have a relatively high market share, but are in a market that is growing very slowly or not at all. If stars maintain their high market share over a longer time, they can become cash cows. Therefore, it’s not a problem to continue investing in these products and therefore ensure long-term success. As market leaders, these “stars” have a high return on investment (ROI). Stars have both a high market share and high market growth. A company cannot afford to fund every business unit in this area and must choose exactly which product it wants to invest money in. The strategy is therefore very clear: selection. The problem is that it requires a lot of investment to make a question mark product more successful because the item can’t support itself. to move into the “stars” category – entrepreneurs have to invest a great deal. In order for the products to be successful in the long term – i.e. These products are called question marks because it’s impossible to estimate any future development.
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These are generally new products and services that still have a small market share compared to that of the competition, but are in a rapidly growing market. Products in the “question mark” category are characterized by high market growth combined with a low market share.
Depending on which zone the product is located in, different strategies can be established for your further planning.
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