Management method to develop strategies. These strategies should give action approaches how to deal with individual products or services of a company. For a realistic assessment of the product porfolio all products or all services of the company are ranged in different categories. The categories are defined by two parameters: market growth and relative market share. While the market share is delineated on the y-axis of the chart, relative market share is represented on the x-axis.
As already mentioned before products/services are ranged in different categories, that are in each case determined by market growth and by relative market share. The four groups are:
Question marks: New products, that have a very high potential of market growth but at the moment only little market shares. The strategie can be defined as a selective approach. You should invest in products with a promising future. But you should avoid further investments in flopping products.
(Rising) Stars: Also relatively new products but products that have already asserted themselves. Products have already high market shares and still further potential regarding their market growth. By looking at Rising Stars you should make further investments. Maybe you are already able to skim financial resources.
Cash Cows: Products that have a stable position on the market. They do not really have market growth anymore but they command a really high market share. You should primarily skim financial resources. Excessive investments are not recommended.
Poor Dogs: These products are outdated and the demand for these products will decline more and more with the time. Products that are called Poor dogs have no more potential for market growth and besides that only little market shares. You should not invest in these products anymore.