Portfolio Analysis Matrix

The Portfolio Analysis Matrix is a strategic tool used to evaluate and prioritize a company's various business units or product lines. It helps in identifying which segments are worth investing in, which should be divested, and which need further development. The matrix typically assesses factors like market growth and market share to categorize the business units into four quadrants.

At a very high level, the Portfolio Analysis Matrix is used in the context of business, finance, strategic management.

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What is the Portfolio Analysis Matrix?

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

  1. Stars: High market growth and high market share; e.g., a leading smartphone model in a rapidly growing market.
  2. Question Marks: High market growth but low market share; e.g., a new product in an emerging market.
  3. Cash Cows: Low market growth but high market share; e.g., a well-established consumer goods brand in a mature market.
  4. Dogs: Low market growth and low market share; e.g., an outdated technology product in a declining market.

What is the purpose of the Portfolio Analysis Matrix?

The Portfolio Analysis Matrix, often referred to as the BCG Matrix or Growth-Share Matrix, is a strategic framework used by businesses to analyze their product lines or business units. The matrix is divided into four quadrants based on two dimensions: market growth rate and relative market share. Each quadrant represents a different strategic recommendation:

  • Stars: These are units with high market growth and high market share. They are leaders in their market and require significant investment to maintain their position and support further growth. An example could be a leading smartphone model in a rapidly growing market.
  • Question Marks: These units have high market growth but low market share. They are uncertain investments that could become Stars or fail. An example might be a new product in an emerging market.
  • Cash Cows: These units have low market growth but high market share. They generate steady cash flow with little investment needed. An example could be a well-established consumer goods brand in a mature market.
  • Dogs: These units have low market growth and low market share. They are often candidates for divestiture. An example might be an outdated technology product in a declining market.

By categorizing business units or products into these quadrants, companies can make informed decisions about where to allocate resources, which units to invest in, and which to divest or phase out. This helps in optimizing the overall portfolio for long-term profitability and growth.


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What templates are related to Portfolio Analysis Matrix?

The following templates can also be categorized as business, finance, strategic management and are therefore related to Portfolio 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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