Product Portfolios Flashcards

All 9 cards in this deck

Name the five stages of the product life cycle in order.

Research and development, introduction, growth, maturity, decline.

Which stage of the product life cycle has sales at their highest with growth slowing down?

Maturity. Competition is strong and the business may soon need extension strategies.

What is an extension strategy?

An action taken to lengthen the life of a product when sales begin to fall.
e.g. new packaging, added features, a new target market, more advertising or a price reduction.

Why does a business use the Boston Matrix?

To analyse the balance of its product portfolio (market share against market growth) and decide which products to invest in or withdraw.

In the Boston Matrix, what is a 'star'?

A product with a high market share in a high-growth market. It needs heavy investment and promotion.

In the Boston Matrix, what is a 'cash cow'?

A product with a high market share in a low-growth market. It earns steady cash that can fund other products.

In the Boston Matrix, what is a 'problem child' (question mark)?

A product with a low market share in a high-growth market. Its future is uncertain and it needs investment to grow.

In the Boston Matrix, what is a 'dog'?

A product with a low market share in a low-growth market. It is often withdrawn or sold off.

True or false? In the Boston Matrix, a cash cow is a product with a high market share in a fast-growing market.

False. A cash cow has a high market share in a low-growth market.