What is the Boston matrix?

It is to analyze the enterprise, choose a good industry through comparison, discard the weak and choose the strong, and make the enterprise profitable. The following may be a little more detailed, I hope it will help you: \x0d\ BCG matrix, also known as market growth rate-relative market share matrix, Boston Consulting Group method, four-quadrant analysis method, product series structure management method, etc. Boston Matrix is an enterprise product portfolio planning method initiated by Boston Consulting Group, a large American business consulting company. The key to the problem is how to make the product variety and structure of the enterprise adapt to the change of market demand, and only in this way can the production of the enterprise be meaningful. \x0d\ At the same time, how to effectively allocate the limited resources of the enterprise into a reasonable product structure to ensure the profits of the enterprise is the key to whether the enterprise can win in the fierce competition. Introduction to Boston Matrix Boston Matrix is a product portfolio planning method initiated by Boston Consulting Group, a large American business consulting company. The key to the problem is how to make the product variety and structure of the enterprise adapt to the change of market demand, and only in this way can the production of the enterprise be meaningful. At the same time, how to effectively allocate the limited resources of the enterprise into a reasonable product structure to ensure the profits of the enterprise is the key to whether the enterprise can win in the fierce competition. According to Boston Matrix, there are two basic factors that generally determine the product structure: market attractiveness and enterprise strength. Market attraction includes the growth rate of enterprise sales, the target market capacity, the strength of competitors and the profit level. Among them, the most important is the comprehensive index reflecting the market gravity-sales growth rate, which is an external factor that determines whether the product structure of an enterprise is reasonable. Enterprise strength includes market share, technology, equipment, capital utilization ability, etc. Among them, market share is the internal factor that determines the product structure of enterprises, which directly shows the competitive strength of enterprises. The growth rate of sales and market share influence each other and are mutually conditional: the market is attractive, the growth rate of sales is high, which can show the good prospect of product development, and enterprises also have corresponding adaptability and strong strength; If only the market is attractive and there is no corresponding high sales growth rate, it shows that the strength of the enterprise is not enough and the products cannot develop smoothly. On the other hand, the products with strong enterprise strength and low market appeal also show that the market prospect of the products is not good. Through the interaction of the above two factors, there will be four different product types and different product development prospects: ① product groups (star products) with "double high" sales growth rate and market share; (2) Product groups with "double low" sales growth rate and market share (thin dog products); ③ product groups with high sales growth rate and low market share (question mark products); ④ Product groups with low sales growth rate and high market share (cash cow products). \x0d\ Basic Principles \x0d\ This method regroups all products of an enterprise from the perspective of sales growth rate and market share. On the coordinate diagram, the vertical axis represents the growth rate of enterprise sales, and the horizontal axis represents the market share. With 10% and 20% as the middle points, the coordinate diagram is divided into four quadrants, namely "question mark (? ), star (★), cash cow (￥), thin dog (×). In use, enterprises can divide their products into different quadrants according to their respective sales growth rate and market share, so that the existing product portfolio of enterprises can be seen at a glance and it is convenient to make different development decisions for products in different quadrants. Its purpose is to make enterprises make different decisions through the division of different quadrants where products are located, so as to ensure the continuous elimination of products with no development prospects, maintain a reasonable combination of "question mark", "star" and "cash cow" products, and realize a virtuous circle of product and resource distribution structure. \x0d\ Basic steps \x0d\ mainly include: ① Accounting the sales growth rate and market share of various products of enterprises. The sales growth rate can be the product sales or sales growth rate of the enterprise. The time can be one year, three years or even longer. Market share, you can use relative market share or absolute market share, but you should use the latest information. The basic calculation formula is: the absolute market share of a product of the enterprise = the sales volume of the product in the enterprise/the total sales volume of the product in the enterprise = the market share of the product in the enterprise/the market share of the product with the largest market share (or the specific competitor) ② Draw a four-quadrant diagram. With 10% sales growth rate and 20% market share as the standard dividing line, the coordinate map is divided into four quadrants. Then, according to the sales growth rate and market share of all products of the enterprise, their corresponding positions (center of the circle) are marked on the coordinate map. After positioning, according to the sales volume of each product in that year, draw circles with different areas and mark them with different numbers to show the difference. Due to positioning reasons, products are divided into four categories. \x0d\ Definition and strategic countermeasures of products in each quadrant \x0d\ Boston Matrix has different definitions and corresponding strategic countermeasures for the four quadrants where enterprise products are located. (1) stars. It refers to the product group in the quadrant of high growth rate and high market share, which may become the cash cow products of enterprises and need to increase investment to support its rapid development. The development strategy adopted is: actively expand economic scale and market opportunities, take long-term interests as the goal, increase market share and strengthen competitive position. The development strategy is to invest in the management and organization of star products, preferably in the form of business divisions, which are handled by operators who are very proficient in production technology and sales. (2) Cash cow products, also known as lucrative products. Refers to the product group in the quadrant with low growth rate and high market share, which has entered a mature stage. Its financial characteristics are large sales volume, high product profit rate and low debt ratio, which can provide funds for enterprises without increasing investment because of low growth rate. Therefore, it has become the backing for enterprises to recover funds and support investment in other products, especially star products. For most products in this quadrant, the decline of market share has become an irresistible trend, so harvesting strategies can be adopted: that is, limiting the input resources and maximizing short-term benefits. ① Minimize equipment investment and other investments; (2) Using the method of oil extraction to gain more profits in a short time and provide funds for other products. For the products whose sales growth rate is still increasing in this quadrant, further market segmentation should be carried out to maintain the existing market growth rate or delay its decline. For cash cow products, it is suitable to use business department system management, and its operators are preferably marketing figures. Cash cow business refers to the business with low market growth rate and high relative market share. It is the leader of mature markets and the source of cash for enterprises. Because the market is mature, enterprises don't need a lot of investment to expand the market scale. At the same time, as a market leader, this business enjoys the advantages of economies of scale and high marginal profits, thus bringing a lot of financial resources to enterprises. Enterprises often use cash cow business to pay accounts and support three other businesses that need a lot of cash. The company shown in the picture has only one cash cow business, which shows that its financial situation is very fragile. Because once the market environment changes, if the market share of this business declines, the company will have to withdraw cash from other business departments to maintain the leading position of the cash cow, otherwise the powerful cash cow may weaken or even become a thin dog. (3) question mark. It is a product group in the quadrant of high growth rate and low market share. The former shows that there are great market opportunities and good prospects, while the latter shows that there are problems in marketing. Its financial characteristics are low profit rate, insufficient funds and high debt ratio. For example, a new product that is in the leading-in period of the product life cycle and fails to open the market situation for various reasons is a product with such problems. Selective investment strategy should be adopted for problem products. That is, firstly, it is determined to invest in those products that may become stars after improvement, so as to increase market share and make them "star products"; For other products that are expected to become stars in the future, support measures will be taken for a period of time. Therefore, the improvement and support plan of the problem product is generally included in the long-term plan of the enterprise. For the management organization of problem products, it is best to take the form of think tank or project organization, and select people with planning ability, courage to take risks and talent to be responsible. (4) Dog products, also known as declining products. It is a product group in the quadrant of low growth rate and low market share. Its financial characteristics are low profit rate, in the state of capital preservation or loss, and high debt ratio, which can not bring benefits to enterprises. Retreat strategies should be adopted for such products: first, reduce batches and gradually retreat, and those products with extremely low sales growth rate and market share should be eliminated immediately. The second is to transfer the remaining resources to other products. The third is to rectify the product series, and it is best to merge the thin dog products with other business divisions for unified management. \x0d\ Edit the application rules of Boston Matrix in this paragraph \x0d\ According to the principle of Boston Matrix, the higher the market share of products, the greater the ability to create profits; On the other hand, the higher the sales growth rate, the more funds are needed to maintain its growth and expand its market share. In this way, the product structure of enterprises can realize the situation of mutual support of products and virtuous circle of funds. According to the division of product position and moving trend in quadrant, the basic application rules of Boston matrix are formed. Rule number one: a successful crescent ring. If the distribution of various products in the business field of an enterprise is crescent-shaped, it is a sign of a successful enterprise, because there is more than one profitable product, and the sales income of these products is relatively large, and there are many star products. Problem products and thin dog products are rarely sold. If the product structure is scattered, it means that the product structure in the enterprise is not well planned and the performance of the enterprise is bound to be poor. At this time, it is necessary to distinguish different products and adopt different strategies. Rule two: the black ball failure rule. If there is no product in the fourth quadrant, or even if there is, its sales revenue is almost zero, which can be represented by a big black ball. This situation shows that the enterprise does not have any profitable products, indicating that the existing product structure should be strategically adjusted by retreating and shrinking, and other businesses should be considered to infiltrate and develop new businesses. The third rule: the northeast is good. The more concentrated the distribution of an enterprise's products in the four quadrants is in the northeast, the more star products there are in the enterprise's product structure, and the more development potential there is; On the contrary, the product distribution is concentrated in the southwest corner, indicating that the number of thin dog products is large, indicating that the product structure of the enterprise is declining and the operation is unsuccessful. The fourth law: the law of active moving speed. From the development process and trend of each product, the higher the sales growth rate of the product, the higher the amount of funds needed to maintain its sustained growth; The greater the market share, the greater the ability to create profits and the longer it lasts. According to the normal trend, the problem products finally enter the stage of cash cow products through star products, which marks the development process of products from simple capital consumption to providing benefits for enterprises, but the speed of this trend also affects the size of the benefits it can provide. If the speed of a product from problem products (including thin dog products) to cash cow products is too fast, it means that it is in a star zone with high investment and high profit rate in a short time, so the possibility and duration of providing profits to enterprises will not be too long, and the total contribution will not be great; On the contrary, if the product develops too slowly and stays in a certain quadrant for too long, the product will be eliminated soon. This method assumes that an organization is composed of two or more business units, and the products of each unit are obviously different and have different market segments. When formulating the development strategy of each product, we mainly consider its relative competitive position (market share) and business growth rate. The former is the abscissa and the latter is the ordinate, and then it is divided into four quadrants. The products of each business unit are filled in the corresponding positions according to their market share and business growth rate. In the application of this method, the task of enterprise managers is to grasp the present situation of product structure, predict the future market changes, and then allocate enterprise management resources effectively and reasonably. When adjusting the product structure, the operators of enterprises should not consider how to retreat from the "lean dog" stage, but how to minimize the losses and maximize the benefits from the "cash cow" stage.