Question

What happens to stars when industry growth slows down?

1) Stars require high funding to fight competitors and maintain their growth rate.
2) Stars become cash cows if they remain a niche leader or are amongst the market leaders.
3) Stars become dogs due to low relative market share.
4) Stars become next cash cows.

Answer 1

When industry growth slows down, stars in the business world face different outcomes depending on their ability to adapt and maintain their competitiveness.

Step-by-step explanation:

When industry growth slows down, the fate of stars in the business world depends on how they adapt to the changing market conditions. Here are the possible scenarios:

1. Stars require high funding to fight competitors and maintain their growth rate. If they are unable to secure funding or fail to innovate, they may decline and eventually exit the market.
2. Stars can become cash cows if they remain a niche leader or are among the market leaders. They can generate consistent profits and support the growth of other products or business units.
3. However, stars can also become dogs due to low relative market share. If their products lose popularity or face intense competition, they may struggle to maintain their position and profitability.
4. In some cases, stars that are unable to sustain their growth or profitability may become the next cash cows. They might shift their focus to maintaining a stable market presence rather than pursuing aggressive growth.