A Growth-Share Matrix, or Boston matrix, allows for a realistic plan of
finances in a manner that is more diverse using symbols and focusing on investments.
Each investment or product is plotted in one of four positions of the matrix based
upon the Market Growth Rate versus the Relative Market Share.
A Boston matrix is best used to focus on many different aspects, such as products, of a
company at once.
- Create a matrix. Create a two-by-two box grid. Place a title or goal on the top.
- Create categories. Place a star in the upper left box, a cow in the lower left box, a question mark in the upper right box, and a dog in the lower right box. The star represents high growth and high market share, the cow represents low growth and high market share, the dogs represent low growth and low market share, and the question marks represent high growth and low market share.
- Label. Near the bottom left corner of the grid draw an arrow going upwards and another going to the right. Next to the top left box write "High Growth Rate" and next to the bottom left box write "Low Growth Rate". Beneath the bottom left box write "High Growth Rate" and beneath the bottom right write "Low Growth Rate".
- Identify finances. Determine which areas of the business fit in to each of the categories on the matrix and place them where they belong.
- Draw conclusions. Using this diagram decide how further money should be spent in the company.