Every product ages, so a business has to plan its portfolio before sales fall. This page covers the product life cycle, the Boston Matrix, extension strategies and new product development.
How do I use the life cycle and the Boston Matrix to make a judgement, rather than just describe the stages and boxes?
The product life cycle shows how a product's sales move through development, introduction, growth, maturity and decline, so a business can plan cash, promotion and pricing. The Boston Matrix sorts a portfolio into stars, cash cows, question marks and dogs by market growth and market share. New products keep the portfolio healthy but can fail.
Year 12 (7137/7138): This is AS content (AS is the first-year qualification), so it sits in AS Paper 1 and in A-level Paper 1. You can meet Define and Explain questions on it, and Assess or Evaluate questions on a case study. Both the product life cycle and the Boston Matrix are sophisticated concepts (Annex 8 of the specification), so they earn credit when you use them accurately.[0]
Year 13 (7132, June 2027): You sit the outgoing specification. The life cycle and Boston Matrix are taught in the marketing content of 7132 section 3.3, so this page is revision, not new material. Use it for the extension strategies and for the new product development judgements, because those are where marks are won on 9 and 15 mark questions.
The specification asks you to understand four things. These are the stages of the product life cycle and why they matter for planning, extension strategies, the Boston Matrix, and the purpose, value and challenges of new product development.[0]
The product life cycle (PLC) shows how a product's sales change over time. It has five stages: development, introduction, growth, maturity and decline.
| Stage | What happens | What the business plans |
|---|---|---|
| Development | No sales yet. Research, design and testing cost money. | Cash outflow, so it needs finance. It must decide whether to launch at all. |
| Introduction | Sales are low. Few customers know the product. | Heavy promotion and often a loss, because costs are high and sales are small. |
| Growth | Sales rise fast. Rivals enter. | More capacity, wider distribution and brand building. |
| Maturity | Sales level off. The market is saturated. | Defend share. Profit and cash are usually at their highest. |
| Decline | Sales fall as tastes change or substitutes arrive. | Extend the life, cut costs or withdraw the product. |
The PLC matters for planning because each stage needs a different marketing mix and a different cash position. A business that knows where its product sits can time its next launch before sales fall.
The model has limits. Products do not all follow the same curve, the stages have no fixed length, and it is hard to know which stage you are in until afterwards.
An extension strategy tries to delay decline or restart sales. The four in the specification are listed here.
The Boston Matrix classifies each product in a portfolio by market growth and market share. Market growth is how fast the whole market is expanding. Market share is the firm's share compared with its rivals.
The model suggests that cash from cows should fund question marks, so that some become stars and later cows. Share is usually measured relative to the largest rival, so a share of 20% means different things in different markets.
A bakery sells four products. Illustrative figures: Product A has sales of £4m of its £10m total, so 40% of revenue. The market for A grows 1% a year and A has the largest share, so A is a cash cow.
Product B has sales of £1m. Its market grows 15% a year but B has a small share, so B is a question mark. The business should decide whether to invest in B or stop. The numbers sort the products, but they do not make the decision.
New product development (NPD) is the process of creating and launching new products. Its purpose is to replace products in decline, reach new markets and keep the portfolio balanced.
Its value is future sales, a stronger brand and a possible lead over rivals. Its challenges are high cost, a long wait before cash comes back, and a real chance of failure because customers may reject the product.
Real businesses rarely say 'we are a cash cow'. You apply the model to the evidence in the case study. The three examples below show different parts of it.
In 2019, vegconomist reported that Greggs sales topped £1bn after the release of its vegan sausage roll.[3] Total sales are not sales of one product, so to place the roll on the life cycle you would need product data.
Dyson cancelled its electric car project in October 2019.[1] Autocar reported in 2020 that the axed project cost Sir James Dyson £500 million.[2] This shows the cost of the development stage, because no sales arrived to repay it.
Apple discontinued the iPod touch on 10 May 2022.[4] This shows a product leaving a portfolio. In a case study, use the data given to say why a business withdraws a product.
To apply the Boston Matrix in an answer, find the market growth and share data in the case study. Place the product in a box, then say what the business should do with cash as a result.
Both models are useful but limited, so evaluation means testing them against the facts in front of you.
The strongest judgement links the model to the business's cash, its market and its objectives. For example, a small firm with one maturing product may need an extension strategy before it can afford NPD.
Most lost marks come from naming parts of the model without using them on the case. Examiners reward accurate use of the concept applied to the business.[0]
Every AQA Business question uses one of five command words, each with a fixed mark tariff, and quantitative questions sit inside the 9 and 15-mark formats. The A-level papers have no 2 or 4-mark questions. Open each format to see how this topic appears in it. All questions here are original Curriculum Circle practice questions, not board questions.
On this topicYou are asked for the meaning of one term, such as extension strategy or cash cow. Two precise lines are enough.
What earns the marksAO1 only: accurate knowledge of the term.
CC practice questionDefine the term 'cash cow'. (2 marks)
On this topicYou explain one way a life cycle stage or box affects a named business, using a detail from the case.
What earns the marksAO1 for the concept and AO2 for applying it to the firm.
CC practice questionMia's Bakery sells a loaf that has had stable sales for ten years. Explain one reason why Mia's might use an extension strategy for the loaf. (4 marks)
On this topicYou build a chain of reasoning from a stage, box or extension strategy to a business effect such as cash, sales or profit.
What earns the marksAO1 and AO2 for knowledge and context, and AO3 for a developed chain of cause and effect.
CC practice questionAnalyse how a rebrand might help a company whose frozen pizza is in the decline stage of its life cycle. (6 marks)
On this topicYou weigh up whether a product should be treated as a star, cow or dog, or whether NPD is worthwhile, giving both sides and then a judgement.
What earns the marksAO1 to AO3 for the argument, and AO4 for a supported judgement.
CC practice questionA snack firm's low-sugar bar is a question mark in a fast-growing market. Assess whether the firm should invest more cash in the bar. (9 marks)
On this topicYou compare two courses of action, for example an extension strategy for a mature product against developing a new product, and recommend one.
What earns the marksAO1 to AO3 for the options, and AO4 for a justified recommendation using the evidence.
CC practice questionA toy company's main product is in the maturity stage. Evaluate whether it should spend £2m on an extension strategy or on developing a new product. (15 marks)
On this topicYou use product data, such as sales, market growth and share, to place products in the Boston Matrix, or to compare revenue by product. The numbers then support an assess or evaluate judgement.
What earns the marksAO2 for selecting the right data, AO3 for working with it, and AO4 for judging what it shows.
CC practice questionUsing the data in the case study, assess whether a business whose cash cow supplies 40% of its revenue is too dependent on one product. (9 marks)
| Weight | What it is | What it means on product: life cycle, boston matrix and new products | |
|---|---|---|---|
| AO1 | 32.5% AS · 24.44% A-level | Knowledge and understanding of terms, concepts, theories, methods and models | Know the five stages, four extension strategies, four Boston Matrix boxes and the purpose and risks of NPD. Use the terms accurately because these are sophisticated concepts. |
| AO2 | 27.5% AS · 24.44% A-level | Application to the business context in the case study | Place the product in a stage or box using case study data, and use the firm's name, market and numbers. |
| AO3 | 20% AS · 26.66% A-level | Analysis of issues and their impact on individuals and organisations | Build chains: stage, then effect on cash or price, so a decision follows. For example, a cow earns cash, so the firm can fund a question mark. |
| AO4 | 20% AS · 24.44% A-level | Evaluation of quantitative and qualitative information to make judgements | Judge whether the model fits, compare options and recommend one, using the firm's cash, market and objectives. |
Weightings are approximate and taken from the AQA AS 7137 and A-level 7138 specification [0].
Dalton Foods' biscuit brand is in the maturity stage. The firm can spend £3m on advertising and a rebrand, or on developing a new biscuit range. Evaluate which option Dalton Foods should choose. (15 marks)
The biscuit is mature, so sales have levelled off and the brand probably earns steady cash. Advertising and a rebrand may reach new customers, so sales rise without a development period. A new range costs more and takes longer, but it could open a faster-growing market.
I would recommend the extension strategy first, because the brand still earns cash and the spend is lower risk than NPD. This holds if the rebrand lifts sales enough to repay £3m within a few years. If market data show the biscuit market is shrinking, NPD becomes the better choice, because extension only delays decline.
In 2019, vegconomist reported that Greggs sales topped £1bn after the release of its vegan sausage roll.[3]
Dyson cancelled its electric car project in October 2019.[1] Autocar reported in 2020 that the axed project cost Sir James Dyson £500 million.[2]
Apple discontinued the iPod touch on 10 May 2022, according to MacRumors.[4]
Everything above is the topic page. The pieces below take it further. Each one trains a particular assessment objective rather than covering the topic again, and they are added over the year.
Figures and facts were checked against these sources on 2 November 2026. Worked numbers labelled "Illustrative figures" are invented for teaching.
For more practice on the life cycle and Boston Matrix, the CC Business revision platform and the Inner Academy's recorded lessons go further.
See the Business platformThe Inner Academy