What are cash cows in BCG matrix?

Description: A Cash Cow is a metaphor used for a business or a product, which exhibits a strong potential in terms of returns in a low-growth market. A cash cow is a term used in the Boston Consulting Group (BCG) matrix. A business becomes a cash cow or a dog depending on its performance in the growth stage.

What is BCG matrix used for?

The BCG growth-share matrix is a tool used internally by management to assess the current state of value of a firm’s units or product lines. The growth-share matrix aids the company in deciding which products or units to either keep, sell, or invest more in.

Why are some products in the Boston matrix called cash cows?

These high growth rates then signal which markets have the most growth potential. Each of the four quadrants represents a specific combination of relative market share, and growth: Low Growth, High Share. Companies should milk these “cash cows” for cash to reinvest.

What is the Boston matrix model?

The Boston Matrix is a model which helps businesses analyse their portfolio of businesses and brands. The Boston Matrix is a popular tool used in marketing and business strategy. It must decide how to allocate investment (e.g. in product development, promotion) across the portfolio.

How are cash cows used in the BCG matrix?

In order to understand cash cows and their place in the BCG matrix, we first need to look at the terms market share and market growth. Market share is the percentage of the total market being serviced by the company. Suppose that your company manufactures soaps.

What is the Boston Consulting Group Growth Share Matrix?

What Is a BCG Growth-Share Matrix? The Boston Consulting Group (BCG) growth-share matrix is a planning tool that uses graphical representations of a company’s products and services in an effort to help the company decide what it should keep, sell, or invest more in.

Which is the market leader in cash cow products?

Star products: Can be the market leader though require ongoing investment to sustain. They generate more ROI than other product categories. Cash cow products: The simple rule here is to ‘ Milk these products as much as possible without killing the cow!

What makes a product in the cash cows quadrant?

Products in the cash cows quadrant are in a market that is growing slowly and of which the product (s) have a high market share. Products in the cash cows quadrant are thought of as products that are leaders in the marketplace.