Business ยท WBS11 (Unit 1)

The product life cycle and the Boston Matrix

Firms manage a range of products, the product portfolio. Two models help them decide where to invest.

Product life cycle

Stages: development, introduction, growth, maturity, decline. Sales are low at introduction, rise fast in growth, level off in maturity and fall in decline. Extension strategies (new uses, new markets, rebranding) try to delay decline.

The Boston Matrix

Products are placed by market growth and relative market share:

Using it

Cash from cash cows is often used to support question marks that might become stars. The model is a snapshot and ignores links between products.

Worked example

A well-known cola has a large market share in a mature, slow-growing market. Classify it.

  1. High relative market share.
  2. Low market growth.

Answer: A cash cow.

Key idea: PLC: introduction, growth, maturity, decline. Boston: star (high/high), cash cow (low growth, high share), question mark (high growth, low share), dog (low/low).

Check yourself

  1. A product has high market growth but low market share. It is a
    • cash cow
    • dog
    • question mark
    • star
    Show answer

    question mark. High growth, low share = question mark (problem child).

  2. Which category usually generates the most spare cash?
    • Cash cow
    • Star
    • Question mark
    • Dog
    Show answer

    Cash cow. Cash cows have high share in mature markets and need little investment.

  3. In which stage do sales rise most quickly?
    • Introduction
    • Maturity
    • Growth
    • Decline
    Show answer

    Growth. Sales rise fastest during growth.

  4. Which is an extension strategy?
    • Stopping production
    • Selling the product in a new market
    • Raising fixed costs
    • Reducing quality testing
    Show answer

    Selling the product in a new market. Finding new markets can delay decline.

  5. One limitation of the Boston Matrix is that it
    • uses market share
    • applies only to services
    • requires profit data from rivals
    • is only a snapshot at one point in time
    Show answer

    is only a snapshot at one point in time. Markets change, so positions change; the matrix does not show this.

Practise with instant feedback

Sources

Last updated 7 November 2026. Spotted a mistake? Email alevel@lifereadysociety.com.