Boston Consulting Group's Portfolio Analysis Classifies a Company's Products or Product

question 22

Essay

Boston Consulting Group's portfolio analysis classifies a company's products or product lines into a two-by-two matrix. What are the bases of classification and what are the products or product lines in each of the four quadrants called? What marketing strategies are usually considered for each of the four classifications?

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Definitions:

Marginal Private Cost

The cost incurred by a firm or individual resulting from producing one more unit of a good, excluding externalities or effects on third parties.

External Benefits

External benefits refer to the positive effects or advantages that a product or activity imparts on individuals or society who are not directly involved in the production or consumption of the good.

Network Externalities

The effect on a user of a product or service that results from an increase in the number of other users of the same or compatible products or services.

Natural Monopolies

Market conditions where a single firm can supply a good or service more efficiently than any competitor due to economies of scale, hence dominating the market.