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Question marks are also sometimes referred to as the problem child. However, they are termed dogs primarily because there is limited potential to grow, they generally have a number of competitive weaknesses, and their level of profitability is relatively minor as compared to a cash cow business/brand. They are likely to generate a small amount of profitability and some may even deliver substantial profits. Dogsĭogs are relatively low market share players in stable mature markets. Therefore while stars are likely to generate significant revenues, they also require significant reinvestment and are unlikely to generate any surplus cash that can be reinvested in other parts of the business.

Typically they are still expanding their product line, expanding into new geographic markets, helping grow the overall market and attracting first-time consumers while defending their market share against aggressive competitors. That means that they have not reached their full potential and are generally competing in a highly attractive marketplace where there is plenty of competitive rivalry.īecause of this market situation, it is necessary to invest significant sums of money into stars. They have a high relative market share, in a fast-growing marketplace. Ideally, a large company will look to have multiple cash cows.

Cash cows are classified by having large relative market shares (being number one or two in the marketplace) in a low growth market, usually where significant changes in market shares are unlikely.Ĭash cows generate surplus cash – hence their name – they require some money for reinvestment but generally they provide the surplus funds to reinvest in other parts of the business.

Cash cows are large businesses/brands in a stable mature market.