Businesses should invest in their stars and can implement vertical integration, market penetration, product development, market development, and horizontal integration strategies. Strategic business units with high market growth rate and high relative market share are called stars. The BCG matrix for Microsoft will help decide on the strategies that can be implemented for its strategic business units. Strategic business units are placed in one of these 4 classifications. The other of these dimensions is the relative market share of the strategic business unit. These first of these dimensions is the industry or market growth. The matrix consists of 4 classifications that are based on two dimensions. Product development: Product development in the case of cash cows refers to improvising the already existing product to make it relevant in the market.ĭid we miss something? Come on! Tell us what you think about our article in the comments section.The BCG matrix is a strategic management tool that was created by the Boston Consulting Group, which helps in analysing the position of a strategic business unit and the potential it has to offer.Most firms aim for larger profits, and hence, maximising its sales should be prioritised. Prioritising the cash cow: A cash cow generates the largest profits without the firm having to invest much.This would require the firm to keep a check on the market demand of its cash cow and gather feedback to make amends if required. Creating a budget: It is almost impossible for a product to sustain itself, and so, a firm is required to set out a budget to make the product still relevant in the market.However, if it’s not the case, firms should spend enough on the sales and promotion of such offerings.

Marketing the product: Some cash cows don’t require a lot of marketing since they are well-established.

Some of these strategies have been listed below: Hence, the firm needs to adopt strategies to aid the firm milk promised profits from such offerings.

These products are typically manufactured by brands that people have have grown to trust over several years.Ī cash cow is integral to a firm as it allows the firm to finance its operations. High market share: A cash cow product is considered a product that is well-established in the market.Just like how a cow is milked, these products are “milked” as the firm refuses to invest too much in a product that belongs to a market with low growth rate. Firms are required to consider replacing them, as they belong to a market that is slowly witnessing a downward trend in its growth rate. Low market growth rate: These products belong to a sluggish market, meaning the market growth for the concerned product is essentially slow.Hence, to be a cash-cow, a product or division should have the following characteristics: The model was the BCG matrix, and firms still use it to planning long-term product strategies.Ī BCG matrix divides the product portfolio into four types and assigns cash cows a spot wherein the growth rate is low, and the relative market share is high. The concept of cash cows was first propagated by a model developed by the Boston Consulting Group.

Bcg Matrix Of Microsoft Company Info