CMA Intermediate · Operations Management and Strategic Management · Strategic Analysis and Strategic Planning
A firm sells an established product with high market share in a slow-growing market, generating surplus cash. In the BCG matrix, how is this business classified?
The business is a cash cow. It has high market share in a low-growth market, so it generates surplus cash with little need for reinvestment. Stars combine high share with high growth, question marks have low share with high growth, and dogs have low share and low growth.
- AStar
- BQuestion mark
- CCash cowCorrect
- DDog
Explanation
High relative market share with low market growth defines a cash cow, which generates more cash than it needs. Stars have high share and high growth, question marks low share and high growth, dogs low share and low growth.
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