Market Analysis Matrix

The Market Analysis Matrix is a strategic tool used to evaluate and categorize different market segments or products based on specific criteria. It helps businesses identify opportunities and threats, and make informed decisions about where to allocate resources for maximum impact.

At a very high level, the Market Analysis Matrix is used in the context of business, marketing, strategy.

Market Analysis Matrix quadrant descriptions, including examples
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What is the Market Analysis Matrix?

A visual explanation is shown in the image above. The Market Analysis Matrix can be described as a matrix with the following quadrants:

  1. Stars: High-growth, high-share products that are market leaders. Example: A leading smartphone model in a rapidly growing market.
  2. Question Marks: High-growth, low-share products with potential but need more investment. Example: A new tech gadget with growing interest but low market share.
  3. Cash Cows: Low-growth, high-share products that generate steady revenue. Example: A well-established household brand in a mature market.
  4. Dogs: Low-growth, low-share products that are candidates for divestiture. Example: An outdated software product with declining sales.

What is the purpose of the Market Analysis Matrix?

The Market Analysis Matrix is a versatile tool used by businesses to assess their market environment and make strategic decisions. It typically involves plotting different market segments or products on a 2x2 grid based on two key dimensions, such as market growth and market share, or customer value and competitive strength. This visual representation helps businesses quickly identify which segments or products are worth investing in, which ones need improvement, and which ones should be divested.

For example, a company might use the Market Analysis Matrix to evaluate its product lines. The top-left quadrant could represent high-growth, high-share products that are market leaders. The top-right quadrant might include high-growth, low-share products that have potential but need more investment. The bottom-left quadrant could contain low-growth, high-share products that generate steady revenue but have limited future potential. Finally, the bottom-right quadrant might represent low-growth, low-share products that are candidates for divestiture.

By categorizing products or market segments in this way, businesses can develop targeted strategies for each quadrant, such as investing in high-potential areas, optimizing cash cows, or phasing out underperforming products. This strategic approach helps businesses allocate resources more effectively and achieve long-term growth and profitability.

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What templates are related to Market Analysis Matrix?

The following templates can also be categorized as business, marketing, strategy and are therefore related to Market Analysis Matrix: Product-Market Matrix, 4 Ps Marketing Mix Matrix, AI Capability-Value Proposition Alignment Matrix, AI Innovation-Value Alignment Matrix, AI Maturity Matrix, AI-Value Proposition Alignment Matrix, AI-Value Proposition Matrix, AIDA Marketing Matrix. You can browse them using the menu above.

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