ACCA Applied Knowledge · Business and Technology · Competitive factors
Which of the following is a recognised criticism of the Boston matrix?
A recognised criticism is that the matrix relies on only two measures: market growth for attractiveness and relative share for strength. Other factors such as profitability, synergy between products and market conditions are ignored, so the classification may oversimplify strategic decisions.
- AMarket growth rate alone may not indicate market attractiveness, and market share alone may not indicate competitive strengthCorrect
- BIt cannot be applied to businesses with more than one product
- CIt considers only the introduction stage of the product life cycle
- DIt requires a firm to have no competitors
Explanation
The matrix uses just two variables, market growth and relative market share, which oversimplify attractiveness and strength. It is designed for portfolios of several products, it does not focus on the introduction stage and it does not require absence of competitors.
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