Management must consider each product or service marketed, and then position it on the matrix. It has two axes, namely relative market share (meaning relative to the competition) and market growth.
The matrix offers an approach to product portfolio planning. More importantly, the model can also be used to assess the strategic position of strategic business units (SBUs), and in this respect it is particularly useful to those organisations which operate in a number of different markets and offer a number of different products or services.
The Boston Consulting Group matrix, which incorporates the concept of the product life cycle, is a useful tool which helps management teams to assess existing and developing products and services in terms of their market potential. There is a fundamental need for management to evaluate existing products and services in terms of their market development potential, and their potential to generate profit.
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