Tuesday, June 23, 2009

Model components:

Star: This category represents the high market share and high industry growth. SBU’s in this category require large investment to defend their position. SBU will turn as cash cow after some time.
Cash cows: This category represents the low growth rate and high market share which is the characteristic of SBU operating in mature industry. Here company needs less investment to hold their position. Hence it generates more cash or in management terms we say cash cow can be milked.

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