Their net contribution to the kitty of the organization is not very substantive. They generate as well as consume revenue. They have the potential to be the cash cows only if they can consolidate their competitive position.

Stars are in the high growth rate and, therefore, highly competitive markets. It has attractive long-term profit opportunities. Eventually, their growth will slow down, and they will turn into cash cows.Īn SBU with high market growth and a high relative market share is considered as a star business-unit. They often need heavy investments to finance their rapid growth. Stars are high-growth, high-share businesses or products. The company can further invest in this brand.Stars: High Growth, High Share Businesses Let us look at the example of bottled-drinking water Kinley, where the industry is still growing, and the product category is also well-established, with a high market share. The industry for this product also has a high growth potential hence earning more cash returns. These products have a significant market share, bringing in the most money.

Stars: 'Star' products are the leading brands for any organisation. It has a meagre market share and limited opportunity to grow as diet beverages have not captured customers' interest. We can further understand this category by taking the example of diet-coke.

These brands are not advisable to invest in as they do not have the capacity of earning revenue for any organisation. This product category has a low market share and a low growth in the industry. As you know, the beverage industry is mature, and the company operates in more than 200 countries earning high revenue.ĭogs: The next product category is dog or pet. Since the industry is not growing anymore and has matured, there is no need to invest in innovation.Īn excellent example of a 'cash cow' product would be coco-cola. I will now explain these categories and how they behave in terms of relative market share and industry growth.Ĭash Cows: Businesses with a high market share but low industry growth are termed 'cash cows.' The name 'cash cows' has been given as any organisation can get high profits from these brands with low investment.

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