If you look at any top 5 telecom company, the market share is good but the g...

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Stars – High market share and High growth rate (high competition). Question marks – Low market share and high growth rate (uncertainty). Dogs – Low market share and low growth rate (less profitable or may even be negative profitability) On the basis of this classification, strategies are decided for each SBU / Product. Let’s discuss the characteristics and strategies of each quadrant in detail for BCG Matrix. 1) Cash Cows The cornerstone of any multi-product business, cash cows are products which are having a high market share in a low growing market. As the market is not growing, that cash cow gains the maximum advantage by generating maximum revenue due to its high market share for BCG Matrix. Thus for any company, the cash cows are the ones which require least investment but at the same time give higher returns.

These higher returns enhance the overall profitability of the firm because this excess revenue can Phone Number Data be used in other businesses which are Stars, Dogs or Question marks. Strategies for Cash cow The cash cows are the most stable for any business and hence the strategy generally includes retention of the market share. As the market is not growing, acquisition is less and customer retention is high. Thus customer satisfaction programs, loyalty programs and other such promotional methods form the core of the marketing plan for a cash cow product / SBU. Also Read What are Dynamic Capabilities and their role in Strategy? 2) Stars The best product which comes in mind when thinking of Stars is the telecom products. Stars are products with high market growth rate but low market share. Thus, there is a lot of competition in this segment. If you look at any top 5 telecom company, the market share is good but the growth rate too is good. Thus because these two factors are high, the telecom companies are always in competitive mode and they have to juggle between investment and harvesting vis investing money and taking out money time to time. Unlike cash cows, Stars cannot be complacent when they are top on because they can immediately be overtaken by another company which capitalizes on the market growth rate. However, if the strategies are successful, a Star can become a cash cow in the long run.




Strategies for Stars All types of marketing, sales promotion and advertising strategies are used for Stars. This is because in cash cow, already these strategies have been used and they have resulted in the formation of a cash cow. Similarly in Stars, because of the high competition and rising market share, the concentration and investment needs to be high in marketing activities so as to increase and retain market share. 3) Question Marks Question marks are products which may have high market share and high market growth, but the market of the product is in question – whether it will grow further or decline. An example of Question marks is desktop computers.