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CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

Which strategy is generally recommended in the BCG matrix for a cash cow business that is in a mature, slow-growing market?

The cash cow should be maintained or harvested. Because it has high share in a mature low-growth market, it produces surplus cash with little reinvestment need, and that cash is used to support stars and selected question marks.

  1. AInvest heavily to gain additional market share at any cost
  2. BHarvest or maintain, using the surplus cash to fund stars and selected question marksCorrect
  3. CLiquidate immediately because growth is low
  4. DDivest only after converting it into a question mark

Explanation

Cash cows have high relative share in low-growth markets and generate more cash than they need. The usual advice is to maintain or harvest them and redeploy surplus cash to stars and promising question marks. Heavy investment is wasteful as growth is low. Immediate liquidation wastes a strong cash generator.

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