SBUs are classified as stars, cash cows, question marks and dogs. High-growth, high-share businesses or products that often need a heavy investments to finance their rapid growth. Eventually their growth will slow down, and they will turn into cash cows.
Which of the following best describes a strategic business unit SBU )?
A strategic business unit is fully-functional unit of a company that operates on its own but is an important part of the company. It operates independently but reports directly to the company’s headquarters.
Is an SBU with low growth low-share business and products they may generate enough cash to maintain themselves but do not promise to be large sources of cash?
Dogs: Dogs are low-growth, low-share business and products. They may generate enough cash to maintain themselves but do not promise to be large sources of cash.
Are low-share business units in high-growth markets they require a lot of cash to hold their share let alone increase it?
High-Growth Markets. Question marks are low-share business units in high-growth markets. They require a lot of cash to hold their share, let alone increase it. Management has to think hard about which question marks it should try to build into stars and which should be phased out.
Which of the following is true about the BCG matrix approach?
Which of the following is true of the BCG matrix approach? It considers market growth rate to be a measure of market attractiveness.
What is an SBU in marketing?
Description: A strategic business unit or SBU operates as an independent entity, but it has to report directly to the headquarters of the organisation about the status of its operation. It operates independently and is focused on a target market.
What is an example of an SBU?
The best example of SBU are companies like Proctor and Gamble, LG etc. These companies have different product categories under one roof. For example, LG as a company makes consumer durables. It makes refrigerators, washing machines, air-conditioners as well as televisions.
Which types of SBUs often produce profits that help to support other SBUs in need of investment?
Cash cows: Cash cows are low-growth, high-share businesses or products. These established and successful SBUs need less investment to hold their market share. Thus, they produce a lot of the cash that the company uses to pay its bills and support other SBUs that need investment.
What is a strategic business unit SBU and how is it involved in a business portfolio analysis?
A strategic business unit (SBU) in business strategic management, is a profit center which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though they may be part of a larger business entity.
Under which cell would SBU with high growth?
SBU’s under Cash Cow are SBU’s with a high market growth.
What are low growth high share business or products?
Low-growth, high-share businesses or products that are established and successful SBUs. They need less investment to hold their market share, thus, they produce a lot of cash that the company uses to support other SBUs that need investment and develop new businesses. Low-share business units in high-growth markets.
Why is it called a cash cow?
A cash cow is a metaphor for a dairy cow that produces milk over the course of its life and requires little to no maintenance. The phrase is applied to a business that is also similarly low-maintenance.
What are the four types of strategic control?
Strategic Control – 4 Major Types: Premise, Implementation, Strategic Surveillance and Special Alert Control.
What is BCG model in strategic management?
The Boston Consulting group’s product portfolio matrix (BCG matrix) is designed to help with long-term strategic planning, to help a business consider growth opportunities by reviewing its portfolio of products to decide where to invest, to discontinue, or develop products. It’s also known as the Growth/Share Matrix.
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.
What is market growth rate in BCG matrix?
Structure of the BCG Matrix
The market growth rate is this years industry sales minus the past years industry sales. The y-axis of the graph/matrix represents rate of market growth while the x-axis represents a products overall market share.