Question

The growth-share matrix defines four types of SBUS?

Answer 1

The growth-share matrix defines four types of SBUs:

• Stars: Consolidate/ Expand
• Question Mark: Improve/Invest or Divest
• Cash Cow: Harvest
• Dog: Divest

What is the growth-share matrix?

The reasoning behind the growth share matrix is that market leadership yields greater profits that are sustainable. In the end, the market leader achieves a cost advantage that is difficult for rivals to match. The markets with the highest development potential are then indicated by these high growth rates.

Each of the four quadrants reflects a particular ratio of growth and market share relative to other quadrants:

• High Share, Low Growth. Businesses should harvest the cash from these "cash cows" to reinvest.
• High Growth, High Share. Because of their tremendous future potential, businesses should heavily invest in these "stars."
• Low Share, High Growth. Depending on their prospects of becoming stars, businesses should either invest in or ignore these "question marks."
• Low Growth, Low Share. These "pets" should be liquidated, divested, or repositioned by businesses.

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