Boston Matrix is a simple analytics diagram displaying business data in a convenient manner to deliver insights to managers on the performance of a product in terms of profitability and sales volumes. This data visualization approach, also known as growth-share matrix or portfolio diagram can be applied not just in terms of product performance but also in terms of ranking almost everything, including customers, revenue sources, marketing activities, etc. It is suitable even for NGOs willing to be more efficient in fundraising.
Why is Boston Matrix a gold standard in strategic planning?
It is proven by the time, it is widely applicable and is easy to use and understand. The outcome of the Boston Matrix is extremely clear by dividing business units into 4 different categories – cows, stars, horses, and dogs. Sure, the matrix should not be perceived as the one and only strategic planning fundament but its output is full of precious insights.
Developed in 1970 by the Boston Consulting Group, hence the name Boston matrix, it makes a series of proven assumptions:
- Market share can be gained by investment in marketing
- Market share gains will generate cash gains
- Cash gains will be generated when the product is in its maturity stage of the product lifecycle
- The best opportunity to build a dominant market position is during its growth phase
How small and medium business owners can benefit of Boston Matrix?
A lot of small and medium business owners are not data savvy and/or are in constant lack of time. Even it is simple enough, the data preparation needs some skills even if you count on templates created by someone else. This is why, at A4E we created series of simple yet effective analytical apps, utilizing Boston Matrix principles while eliminating the burdens.
Boston Matrix and menu engineering. There is a tool!
One of the recently developed by A4E Boston matrix tools simplifies the process of menu engineering. It is widely used within the restaurant industry to evaluate the popularity and the revenue contribution of every menu offering. Such knowledge is valuable when a restaurant manager is optimizing its products and their prices. By highlighting the most profitable and supporting such with revenue growth potential even unexperienced manager can easily boost profits up to 15%, says Gregg Rapp.
Learn more on a4MenuEngineering
Boston matrix and clients optimization. There is a solution!
Ranking clients in terms of revenue generation and purchased units mean clear picture of the clients` portfolio. This is a valuable information for every B2B enterprise like the wholesalers for instance. Having such information it is easy to know where to focus your attention and which of your client’s retention is crucial. If a B2B vendor is able to be flexible with the pricing, Boston matrix tool will display clearly where and how to proceed. On top of this, A4E`s BCG solutions are capable of displaying the dynamics of the relationship between the vendor and its clients in terms of volumes and profitability. This way a trend can be easily detected and to proceed accordingly.
Learn more on a4ClientsOptimization
Boston matrix and product portfolio. There is an app for this!
The BCG matrix divides the product portfolio units into four different categories – stars, puzzles, cows, and dogs, depending on their profit contribution. By utilizing the growth-share matrix with a4ProductPortfolio, you will get analytical insights on how your products perform and a clear view on which of them form the business backbone and which of them just fill in space and should be adjusted, removed or replaced.
Learn more on a4ProductPortfolio
Need more information on Boston matrix? Learn more with this interesting video, hosted by Jim Riley for tutor2u.