Cash cow
A cash cow has a high relative market share in a low-growth market and should be generating substantial cash inflows.
The period of high growth in the market has ended (the product life cycle is in the maturity or decline stage), and consequently the market is less attractive to new entrants and existing competitors.
Cash cow products thus tend to generate cash in excess of what is needed to sustain their market positions.
Profits support the growth of other company products.
The firm's strategy is oriented towards maintaining the product's strong position in the market.
Star
A star has a high relative market share in a high-growth market. A star may be only cash-neutral despite its strong position, as large amounts of cash may need to be spent to defend an organisation's position against competitors.
Competitors will be attracted to the market by the high growth rates.
Failure to support a star sufficiently strongly may lead to the product losing its leading market share position, slipping eastwards in the matrix and becoming aproblem child.
A star, however, represents the best future prospects for an organisation.
Market share can be maintained or increased through price reductions, product modifications, and/or greater distribution.
As industry growth slows, stars become cash cows.
Problem child
A problem child (sometimes called 'question mark') is characterised by a low market share in a high-growth market. Substantial net cash input is required to maintain or increase market share.
The company must decide whether to do nothing (but cash continues to be absorbed) or market