What are the different parts of the Boston Consulting Group matrix? Know what happens to growth and profitability in each of the four stages.
• Cash Cow: A business unit that has a large market share in a mature, slow industry. Requires little investment and generate cash that can be used to invest in other business units.
• Star: A business unit that has a large market share in a fast-growing industry. Generate cash, but due to the market growing rapidly, they require investment to maintain their lead. If successful, a star will become a cash cow when the market matures.
• Question Mark: A business unit that has a small market share in a high growth market. These business units require resources to grow market share, but whether they will succeed and become stars is unknown.
• Dog: A business unit that has a small market share in a mature industry. May not require substantial cash, but it ties up capital that could better be deployed elsewhere. Unless a dog has some other strategic purpose, it should be liquidated if there is little prospect for it to gain market share.