What is the Boston Model?
The Boston Matrix is a strategic analysis tool that helps you evaluate your products or business units based on two simple parameters: market growth and relative market share. The Boston Consulting Group developed the model in the 1970s to give managers a visual overview of where a company’s strengths lie and where it makes sense to invest or withdraw. In other words, the model helps you allocate resources to the areas that create the most value for the business in both the short and long term.
In this model, you work with a four-quadrant coordinate system where you position your products based on data. The vertical axis shows market growth—that is, how quickly the market is expanding. The horizontal axis indicates relative market share, which compares your product to that of your largest competitor. When you plot your products on the matrix, they fall into four categories, each of which requires a different strategy.
The four categories are as follows:
- Question Mark: Products in high-growth markets but with a low market share. They have potential but require investment to demonstrate their value.
- Stars: Products that perform strongly in high-growth markets. They are often the company’s focus areas and require continuous investment to maintain their position.
- Dairy Cows: Products with a high market share in low-growth markets. Here, you can generate stable earnings without making heavy investments.
- Dogs: Products in markets with weak growth and low market share. They rarely contribute to growth and may be candidates for phase-out.
Question mark
Question marks are typically new products in the introduction phase. They have a low market share but operate in a rapidly growing industry—and therefore require active efforts to capture the market. If they succeed, they can develop into stars. If they don’t, growth will slow, and the product will slip into the “dog” category.
Star
Stars are products with high growth and a high relative market share. They are important to the company because they help build a strong brand—but they require ongoing investment to maintain their position. The goal is to develop them into cash cows. If this does not happen, they risk falling into the dog category.
Milking Cow
Dairy cows hold a large market share in a slowly growing industry. They require minimal marketing and generate stable revenue—and are therefore attractive to the company. The risk is that the company will exploit them too much without investing in the product’s future, which will gradually weaken it.
Dog
Dogs have a low relative market share in a slowly growing market. They are typically neglected cash cows that are being left behind by the market. They generate limited profits and tie up resources that could be better invested. Therefore, they should either be phased out or repositioned—otherwise, they risk becoming a genuine expense.
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How do you use the Boston model?
You use the Boston Matrix to analyze your portfolio and prioritize where to invest, develop, or divest. It’s a management tool that helps you balance short-term profitability with long-term growth. When you combine the model with market and customer insights from, for example, digital strategy and branding, you gain a more nuanced basis for decision-making.
To apply the model in practice, you must first collect data on market growth and market share. Next, plot your products or business units onto the matrix. The analysis provides a visual overview of where your portfolio lacks balance—perhaps the “cash cows” dominate, and you have too few “question marks” to ensure future growth. In that case, you should assess where you can create new areas of growth through innovation or targeted marketing—for example, through digital design or content production that raises awareness of the new products.
That's why you should use the Boston model
The Boston Model serves as a decision-making tool that makes strategic planning more concrete. It helps you understand how your products or services are performing and where you should focus your efforts. It’s not just about how well a product is selling right now, but also about how the market is evolving and which products could become future sources of revenue.
If you work in marketing strategy or performance marketing, the Boston Model can provide structure for your resource allocation. For example, you can use it as a framework to assess which campaigns to prioritize through SEO or Google Ads, and which ones require less attention. This ensures that you invest in the areas with the greatest potential for return on investment, without losing sight of the more stable contributors in your portfolio.
What types and varieties are available?
The classic Boston model is always based on a product’s market growth and market share. However, it has since been interpreted and adapted to many different business areas. In digital marketing, for example, the model is used to evaluate campaigns, channels, or websites. Here, you can let the market growth value represent traffic growth and the market share represent conversion rate or revenue.
An example might be:
A website with high traffic growth and strong conversion rates is a star performer. One with stable revenue but low growth is a cash cow. A site with low traffic and low conversion rates, on the other hand, falls into the "dog" category, so you should consider whether you want to continue investing in it.
The same principle can be applied to campaigns, keywords, or products in e-commerce. The model can even be used in a social media strategy, where you assess which platforms or content formats are experiencing growth and which ones should be phased out.
How do you use the Boston Model in practice?
When applying the model in practice, you start by defining the metrics. Market growth can be expressed as the percentage increase in market size over a period, while market share is calculated as the ratio of your revenue to that of your largest competitor. Next, place each product in the relevant quadrant and consider which strategy is most appropriate. Question marks should be developed, stars should be defended, cash cows should be milked, and dogs should generally be phased out.
When you combine the analysis with specific marketing activities, you can use it as a management tool for campaign planning. For example, you can support the continued growth of “stars” with targeted paid social, while optimizing “cash cows” through SEO to maintain their stable revenue stream. In this way, the Boston Matrix becomes not only a strategic tool but also a practical tool in your day-to-day operations.
What should you keep in mind?
Although the Boston Model is useful, you should view it as a general guideline rather than a comprehensive basis for decision-making. The model simplifies reality and does not account for factors such as competitors’ innovation, changing consumer needs, or trends that rapidly impact the market—especially within digital channels. Nor does it assess synergies between products or brand equity, which often play a key role in marketing strategy.
That’s why you should always combine the Boston Model with other analyses and data sources that can provide a more nuanced picture. In a digital context, for example, you can combine it with KPIs from Google Ads, organic traffic data from SEO, or performance metrics from social media. This way, you can use the model to gain a strategic overview while making data-driven decisions that align with your company’s overall marketing goals.
