PM Checklist For Portfolio Management: Star, Dog, Cow, ?
As a PM, it is too easy to develop tunnel vision for your products and simply focus on maximizing the value of your products without planning for the bigger picture. Understanding how a product fits in the overall organizational portfolio can enable PMs to analyze the relative potential of the product and set realistic goals/timeline.
There’s no shortage for frameworks to map the strategic relevance of products — here’s one of my favorites, BCG Matrix. Also known as the Product-Portfolio Matrix, BCG Matrix is a simple toolkit that allows product leaders to categorize products into groups based on their industry potential and market share:
Stars: High Market Share + High Growth
New products start as “Stars” — with slow sales and need Marketing resources. Sales grow rapidly as customers learn about the product. Company investments need to be prioritized for stars to sustain such high growths. As growth stabilizes, the product becomes a Cash Cow with consistent revenue that can help fund Stars.
If a Star product doesn’t grow, there are two main reasons:
- High competition from other products — Question Mark products
- Low potential for market growth — Dog products
Question Marks: Low Market Share + High Growth
Question Mark products are the market laggers that have a high potential for growth with the right strategy. Investments must be focused on understanding and overcoming competition. It is critical to evaluate: Is the product worth additional investment? Can it rise against the competition? Or should it be allowed to die?
Dogs: Low Market Share + Low Growth
Dog products are at the end of their lifecycle and have a low market share in a stagnant industry. Successful Cash Cows can potentially lose their edge and transform into Dogs as demand slows and maintenance costs grow. New technologies, rapidly evolving consumer preferences, or even market saturation are some of the triggers. Grasping the root cause will help determine the next investment — a new technology or product to develop new Stars.
Cash Cows: Low Market Share + High Growth
Regularly mapping products allows for timely adjustments and possibly extending the “Cash Cow” phase of the product. Product Managers tend to fall into the trap of extending the roadmap to morph an already mature product into Cash Cow.
Its important to note that products go through multiple phases — from Star to Question Marks to Cow to Dog. The key is revisiting this framework often to evolve with the changing market dynamics and developing appropriate strategies to extend the lifecycle and profitability of your portfolio.
Here are some more blogs that you might enjoy:
