This means that the organization has to develop some competencies to make the best use of high growth rates. Question marks lie in the high business growth rate segment with a weak competitive position. Since this Strategic Business Unit (SBU) has a lack of opportunity for future expansion, more cash should not be injected. It is a highly profitable firm and generates a substantial amount of cash. Management has to think hard about which question marks it should try to build into stars and which should be phased out.Īn SBU is considered as a cash cow when it has low market growth and high market share. They require a lot of cash to hold their share, let alone increase it. Question marks are low-share business units in high-growth markets. Question Marks: Low-Share Business Units in If more cash is poured down into this SBU and properly nurtured, it may become a star Strategic Business Unit (SBU). It may offer-opportunities for long-term profit. However, such a unit is considered to have a future. A question mark business-unit is risky due to the inherent uncertainty in a high-growth market and weak market share position. It is relatively weak in competitive terms. Thus, they produce a lot of the cash that the company uses to pay its bills and support other Strategic Business Units (SBUs) that need investment.Ī Strategic Business Unit (SBU) is considered a question mark when it has high market growth and low market share. These established and successful Strategic Business Units (SBUs) need less investment to hold its market share. The surplus cash can be used to nurture those businesses that are in the star quadrant or the question mark quadrant.Ĭash cows are low-growth, high-share businesses or products. They generate far more cash than they consume. Cash Cows: Low-Growth, High-Share Businessesįrom the matrix, it is clear that these businesses operate in the industries which are in the maturity stage and hold a very strong competitive position in their respective industry. Their net contribution to the kitty of the organization is not very substantive. They generate as well as consume revenue. They have the potential to be the cash cows only if they can consolidate their competitive position. Stars are in the high growth rate and, therefore, highly competitive markets. It has attractive long-term profit opportunities. Eventually, their growth will slow down, and they will turn into cash cows.Īn SBU with high market growth and a high relative market share is considered as a star business-unit.

They often need heavy investments to finance their rapid growth. Stars are high-growth, high-share businesses or products.

Stars: High Growth, High Share Businesses

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