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Dear Tutor,
In december 2010 bcg model
Shoalpro
Market growth is 0.25 to 2
Market share is 0.4 to 0.4Why is it a cash cow and not a question mark when my market growth is high?
I think it looks at the increase in market turnover which is 2% from 2007 to 2009 instead of the increase in its market growth rate of from 0.25% to 2%.
ShoalPro 2007 2008 2009
Turnover of market sector 40·00 40·10 40·80
Turnover of ShoalPro 16·00 16·20 16·50It’s clearly a cash cow. The market growth is very low (around 2%) and shoalpro has a very high market share (40%). Hence according to BCG, high market share in low growth mkt imply that the bus is a cash cow. Note for market growth rate to be high it should normally be around 10% or more. if that was the case then shoalpro would have been a star, still not a problem child/?. In that question Shoalfarm can be classified as prob child (High growth rate with very low market share (10%) and shoalfish may be a dog. But remember; one of the limitations of BCG is that it does not define what constitute a high growth rate and low growth rate. Nevertheless some judgement will be needed in exam and so according to my judgement (and even that of the examiner, it seems) shoalpro would be classified as a cash cow.
Hope it’s helpful bro!
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