example of stars category in the bcg matrix

For example, a relaunch with an improved product can be promising. However, with a thorough analysis, Dogs can also become profitable. It is usually recommended to reduce products or projects in this area, by for example reducing production capacity, discontinuing them altogether, or reducing marketing budgets.

Dogs have limited growth opportunities and generate little cash flow, meaning they have not met expectations and have not achieved desired sales.

By conducting a thorough analysis and closely monitoring them, you can better understand the question marks and decide on a strategy to prevent these projects or products from becoming a cost burden. They should be carefully analysed to determine whether they can become Stars, where investments pay off and market shares are gained, or if there is a greater likelihood that they will fall short of expectations and become Dogs. Usually, these are product innovations or new products positioned in growth markets with little or no market share.

Question Marks are projects or products for which the likelihood for success cannot yet be estimated.

To maximize profits and increase profitability, it is also possible to optimize these products or projects by improving production, reducing costs, or automating processes. The recommended strategy for business units in this category is to capitalize on the profits generated and invest those in Stars.

They are self-sustaining with a high demand or market share and may even be market leaders.

In contrast, Cash Cows can serve as a source of financing for other products or projects since they generate high cash flow but have limited growth potential.

This may involve further developing a product or project, expanding capacities, or exploring new distribution channels. Therefore, a possible strategy is to prioritize and invest in stars to fully exploit their growth potential. They have already been successfully introduced to the market and have gained new market shares.

Stars have the highest growth potential and are likely to be profitable.

Setting priorities and defining strategiesĪfter categorizing the business units, you can create a priority list and establish strategies for each quadrant or business unit.

Example of stars category in the bcg matrix