Move from the star position of high growth to the Cash Cow

As the impact of the product life cycle takesД®ffect and the market growth rate slows the product will Market growth rate slows and market leadership isДЄchieved. The productвЂ™s position will move towards the star position If the investment necessary toД«uild sales and market share is successfully made, then Growth markets, but suffer from a low market share. These phases are typically represented by anДЄnti-clockwise movement around the Boston Matrix quadrantsДЇrom a market entry position as a ' Question Phases of introduction, growth, maturity and decline. Opportunities moves through ' life-cycle' Life Cycle concept (below), which states that business The theory underlying the Boston Matrix is the Product Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share. A dog may not require substantial cash, but it ties up capital that could better be deployed elsewhere. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.Дog - a business unit that has a small market share in a mature industry. Question Mark (or Problem Child) - a business unit that has a small market share in a high growth market. If successful, a star will become a cash cow when its industry matures. Stars may generate cash, but because the market is growing rapidly they require investment to maintain their lead. Star - a business unit that has a large market share in a fast growing industry. Cash cows require little investment and generate cash that can be used to invest in other business units. Resources are allocated to business units according to where they are situated on the grid as follows:Д¬ash Cow - a business unit that has a large market share in a mature, slow growing industry. The BCG growth-share matrix displays the various business units on a graph of the market growth rate vs. In the early 1970's the Boston Consulting Group developed a model for managing a portfolio of different business units (or major product lines). Companies that are large enough to be organized into strategic business units face the challenge of allocating resources among those units.

Boston consulting product matrix