{"id":8286,"date":"2026-05-29T11:52:07","date_gmt":"2026-05-29T02:52:07","guid":{"rendered":"https:\/\/mirai-works.co.jp\/consulnext\/?post_type=column&p=8286"},"modified":"2026-06-12T10:54:22","modified_gmt":"2026-06-12T01:54:22","slug":"8286","status":"publish","type":"column","link":"https:\/\/mirai-works.co.jp\/consulnext\/en\/column\/8286\/","title":{"rendered":"What Is PPM (Product Portfolio Management) Proposed by the Boston Consulting Group? A Detailed Explanation of How to Use It and Its Benefits"},"content":{"rendered":"\n

PPM (Product Portfolio Management) is a management strategy framework used to determine how companies should combine multiple businesses and products, and how to allocate management resources. This article explains the basic concepts of PPM analysis, how to use it, and the benefits and points to consider when applying it to strategy formulation. You will gain insights into how to review your company’s business portfolio and make the most of limited resources.<\/p>\n\n\n

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Understanding the Basics of PPM (Product Portfolio Management)<\/h2>\n\n\n\n
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PPM stands for “Product Portfolio Management.” It is a management methodology proposed in the 1970s by the Boston Consulting Group, an American consulting firm.<\/p>\n\n\n\n

Its main purpose is to help companies decide where to concentrate their limited management resources (people, goods, money, and information) across multiple businesses and products, and where to recover investments.<\/p>\n\n\n\n

It is defined as a strategic decision-support tool that evaluates and categorizes each business using objective indicators to optimize the balance of growth and profitability across the entire enterprise.<\/p>\n\n\n

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The Four Quadrants That Make Up the PPM Analysis Framework<\/h2>\n\n\n\n
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In PPM analysis, the vertical axis represents “market growth rate” and the horizontal axis represents “relative market share.” Businesses are classified into four quadrants using this framework.<\/p>\n\n\n\n

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Figure 1: PPM Diagram<\/figcaption><\/figure>\n\n\n\n

These four positions are named “Star,” “Cash Cow,” “Problem Child,” and “Dog.”<\/p>\n\n\n\n

This four-quadrant framework is useful for visualizing which stage of the product lifecycle each business is in.<\/p>\n\n\n\n

By visually grasping the current state and future potential of each business, you can develop an optimal management resource allocation strategy.<\/p>\n\n\n\n

Star: A Future Ace Business with High Growth and Market Share<\/h3>\n\n\n\n

The “Star” is a position for businesses and products with both high market growth rate and high relative market share, showing very promising future potential.<\/p>\n\n\n\n

The market is expanding rapidly, and maintaining a high share within it generates significant cash flow.<\/p>\n\n\n\n

However, because it is a growth market, competition is fierce, and aggressive investment is essential to maintain and expand market share. This means cash outflows are also large.<\/p>\n\n\n\n

While heavy investment is required currently, as market growth slows in the future, these businesses are expected to transition into “Cash Cows” \u2014 the next core revenue drivers \u2014 making them the true star candidates for the company.<\/p>\n\n\n\n

Cash Cow: A Core Business That Generates Stable Revenue<\/h3>\n\n\n\n

The “Cash Cow” is where businesses and products with low market growth rate but high relative market share are positioned.<\/p>\n\n\n\n

Because the market has entered a mature phase, the threat of new entrants is low, and large-scale additional investments to maintain market share are not required.<\/p>\n\n\n\n

As a result, these businesses can generate stable and substantial cash flow with minimal investment.<\/p>\n\n\n\n

This position plays an important role in supporting the company’s revenue base.<\/p>\n\n\n\n

Channeling the abundant funds generated here into investments in the high-potential “Stars” and the promising “Problem Children” is the key to creating a sustainable growth cycle for the entire company.<\/p>\n\n\n\n

Problem Child: A Business in a Growth Market That Struggles to Expand Market Share<\/h3>\n\n\n\n

The “Problem Child” refers to businesses and products with a high market growth rate but low relative market share. The market itself is attractive and has future potential, yet the company has not established a strong share amid intense competition.<\/p>\n\n\n\n

Escaping this position requires aggressive investment to expand market share. This calls for a critical management decision: either intensify investment to nurture it into a “Star,” or reduce investment and withdraw if future prospects look bleak.<\/p>\n\n\n\n

Examples include newly launched businesses in growth markets. If successfully nurtured, they can yield significant returns; however, they also carry the risk of falling into the “Dog” category even after heavy investment.<\/p>\n\n\n\n

Dog: A Withdrawal Candidate with Low Market Attractiveness and Low Market Share<\/h3>\n\n\n\n

The “Dog” is the category for businesses and products with both low market growth rate and low relative market share.<\/p>\n\n\n\n

With little market growth expected and low competitiveness within it, profitability is poor and future growth in cash flow is difficult to anticipate.<\/p>\n\n\n\n

The basic strategy in PPM analysis is to consider downsizing, selling, or withdrawing from these businesses.<\/p>\n\n\n\n

This is done to redirect management resources toward the more promising “Stars” and “Problem Children.”<\/p>\n\n\n\n

However, since some businesses may secure stable profits in specific niche markets or create synergies with other businesses, it is important to examine from multiple perspectives rather than mechanically deciding to withdraw.<\/p>\n\n\n\n