Cash cows provide the cash required to turn question marks into market leaders, cover the administrative costs of the company, fund research, and development, service the corporate debt, and pay dividends to shareholders.These are business units or products that have a high market share but low growth prospects, such as: Companies are advised to invest in stars.Ĭash cows are the leaders in the marketplace and generate more cash than they consume.Stars can eventually become cash cows if they sustain their success until a time when the market growth rate declines.

However, because of their high growth rate, stars consume large amounts of cash. Monopolies and first-to-market products are frequently termed stars.The business units or products that have the best market share and generate the most cash are considered stars, such as: It is ideal for long-term strategic planning, letting you review your products or services and decide if they should be invested in or discontinued.Įdit this BCG template The Four Compartments Stars In other words, it showcases the product life cycle theory in a 2×2 matrix, assuming market share is the primary success factor. The matrix plots a company’s offerings in a four-square matrix as shown below, with the y-axis representing a rate of market growth and the x-axis representing market share. The matrix has been used since 1968 to help companies gain insights on what products best help them capitalize on market share growth opportunities. The BCG matrix was created by the Boston Consulting Group also known as the Boston or growth-share matrix which is a planning tool that uses graphical representations of a company’s products and services to help the company decide what it should keep, sell or invest more in. View and play PowerPoint presentations online.

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