Boston Box
Introduction
Portfolio Analysis tool, more popularly referred to as Boston Box helps with understanding and categorising the products (and/or services) within an organisation. It is an internal analysis technique that helps to analyse the portfolio investments, in terms of market share held and the market growth.
The products and business units are divided into following four quadrants:
- Wild cat - New entrants (Low market share, but high market growth)
- Star - Potential for growth (High market share, and high market growth)
- Cash cow - Matured (High market share, but low market growth)
- Dog - On the declining path (Low market share, and low market growth)
The portfolio analysis enables to have a deeper look at the strategic investment at the various business units, thereby aiding better decision making in investment re-allocation.
After plotting the products/business units on the map across the axes of market growth and market share, the management is in a better position to decide about the strategic investments in the organisation's portfolio.
Typically, the following decisions are relevant based on the quadrant in which they fit in:
- Wild cat - Build (need more investment and support at this stage)
- Star - Hold (need a sustained level of investment)
- Cash cow - Milk/ harvest (need to leverage their returns generating ability)
- Dog - Divest (need to drop them at the earliest, as they sink the investments)
Purpose
Plot the various products and offerings of the organisation across the four quadrants. Helps to identify the high performing ones as well as those that need to be dropped.
Stake holders
Senior Management, Executives, Board of directors, Strategy consultants, Marketing directors, Sales directors, Analysts
Context
This internal analysis technique is used to understand the current portfolio investments to assess the performance of the products and/or business units.
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