Audi – The Boston Matrix

All companies have various degrees of success throughout their product portfolios – this is particularly true at Audi, the German car manufacturer. To classify each car model’s success – and therefore allocate resources, like advertising budgets, more effectively – the Boston Matrix can be used by Marketing managers. This matrix essentially classifies products as follows: Rising Stars, which have a high market share of a quickly growing market; Cash Cows, which have a high market share of a slowly expanding market; Dead Dogs, which have a low market share of a stagnant market; and Question Marks that have a low market share of a quickly growing market.

What proactive, and innovative companies like Audi – ‘Vorsprung durch technik’, Audi’s ethos, translates as ‘lead through technology – aim to do is to have at least one Rising Star in their product portfolio; Audi’s new A8 (above) is packed with new technology that will eventually become widely available in the majority of cars. Hence, the Boston Matrix often, but not always, follows the Product Life Cycle. The car taps into the growth of the internet: Google Maps and Earth is integrated with SAT NAV and syncs with a home PC to plan routes and the car will soon function as a WLAN hotspot. A benefit of such innovation is that the first-mover advantage often leads to a dominant market position, which in turn has created a Rising Star. Although, the R&D behind the car is hugely expensive, this can be mainly funded by a cash-cow; for Audi, this has been their TT Cope and Roadster that provide healthy, and consistent, source of internal finance.

However, as with any major company, there are products in Audi’s portfolio that are not as successful – yet, they need to be fully integrated and managed as one within the Boston Matrix. The Question Mark of Audi’s portfolio is the e-tron A1, an electronic spin-off of their A1 hatchback car. As the cliché name may lead you to infer, Audi is hoping to compete in the niche for environmentally friendly cars. As a whole market, this niche has been rapidly expanding – for instance, Toyota’s Prius has become universally known as a market leader – as consumers become more concerned with the environment. However, Audi is synonymous among customers for quality, not ethics; the e-tron A1 thus has low market share and may need to be nurtured through its life cycle from the TT’s sales revenue. And Audi’s Dead Dog? Their clothing range. Despite not requiring myself to elaborate: generic clothing is not going anywhere and when was the last time you saw someone wearing and Audi-branded T-shirt?

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