Hi kids, new module let start with BCG Growth share matrix given by Mr. Bruce, CEO of Boston consulting group from 1963 to 1980 right now here in he described everything with star, question mark cash cow and dog, let us understand ok, now here in X axis you can see relative market share which is low, high and on the Y axis you can see market growth rate right lets check number one BCG growth share matrix stage II stars SBU’s that grow rapidly, they also need heavy investment to maintain their position, finance and their rapid growth potential. Best opportunity for expansion. Make more right investments. Forward and backward integration and market expansion. Cash cows, now these are those companies or products right with low growth and high market share. They generate cash and have low costs. They are established successful and needless investment to maintain their market share. In the long run when the growth rate slows down stars become cash cows. Question Mark, they are problem child or wild cats, low market share in high business growth. Heavy investment low potential to generate cash. If unattended capable of becoming cash traps, we need to decide whether to strength them or sell them. Dogs finally, low growth, low share, sometime they need cash to survive. We need to decide divest, liquidate or retrench. BCG right, after classifying the SBU’s as above what role will be played by each future. There are four strategies available, build to increase market share. Hold to preserve market share.
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